Proposed data protection rules will overburden MSMEs and hinder exports

A risk-based strategy to data protection may allow India to concurrently shield person rights and unlock its potential as a world manufacturing and export powerhouse
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India’s proposed data protection rules will overburden MSMEs and hinder the nation’s export ambitions within the present world political atmosphere, stated IndusLaw agency whereas internet hosting a digital panel dialogue on the proposed Digital Private Data Protection (DPDP) Rules.

Talking in regards to the affect on small companies, c, stated, “The DPDP rules of their present kind can turn into a major obstacle to scale for small and mid-sized companies. A one-size-fits-all strategy imposes a disproportionate compliance burden on SMBs, stifling innovation and progress. As a substitute, risk-based laws can be a greater strategy.”

Data localisation may complicate commerce

To completely leverage the present geopolitical shifts round tariffs, panelists requested that India enhance its ease of doing enterprise by making certain easier and extra proportionate compliance frameworks within the rules. A risk-based strategy to data protection may allow India to concurrently shield person rights and unlock its potential as a world manufacturing and export powerhouse, whereas not doing so dangers discouraging funding and innovation, stated the agency.

Kamesh Shekar, Senior Programme Supervisor – Privateness, Data Governance and Co-lead – AI, The Dialogue, stated, “Data localisation necessities may additional complicate the event and coaching of AI fashions, which regularly depend upon cross-border data flows. Moreover, with out mechanisms like ‘reputable curiosity’ or alternate authorized bases — which can be found in frameworks just like the GDPR — India dangers limiting innovation by making it troublesome for companies to entry numerous, world datasets important for mannequin accuracy and equity.”

On youngsters’s data

Audio system argued that the rules will result in vital implementation challenges round verifiable parental consent mechanisms.

Meghna Bal, Director at The Esya Centrestated, “In response to a examine by the Esya Centre, 76 per cent of kids choose personalised content material. And 73 per cent stated that they’d really feel uncomfortable/ unsafe if content material was depersonalised. For focused advertisements – 75 per cent of kids indicated that they’d not be capable of uncover academic and non-educational merchandise (toys, films and many others) meant for them if focused advertisements went away. 81 per cent of kids stated they’d be sad if strict privateness rules led them to lose entry to age-appropriate merchandise. And 75 per cent stated this lack of entry would negatively have an effect on their routine.”

In the meantime, different panellists raised considerations on the present binary age-verification mannequin, which restricts verification to solely two strategies. The blanket restriction on behavioural promoting and monitoring for minors was additionally marked as overly broad and misaligned with precise on-line behaviour patterns amongst youngsters.

Privateness by design

Specialists referred to as for the adoption of privacy-enhancing applied sciences that embed protection by design. They requested to re-evaluate conventional notions of consent and discover, calling as a substitute for consent options that may help accountable innovation. Moreover, panellists highlighted {that a} vertical-specific regulatory framework, as seen within the US, can be more practical in addressing the distinctive dangers and wants of various sectors.

Revealed on April 16, 2025