India’s DPDP Rules: A game-changer for data-driven marketing?

As someone who has spent years navigating the complexities of global marketing campaigns, I can tell you that India’s proposed Digital Personal Data Protection Act, 2023 (DPDP Act) isn’t just another privacy regulation—it is a game-changer that will reshape how we handle consumer data.

The country is making bold moves to assert its digital sovereignty, and for good reason. With one of the world’s largest digital consumer bases, it is determined to protect its citizens’ data while positioning itself as a major player in global data governance.

We have already seen this commitment through the Reserve Bank of India’s mandates for payment systems—a clear signal that data localisation is more than a mere policy document; it is a strategic priority. But there is a lot at stake here as the new regulations have profound and far-reaching implications for marketing professionals. 

The ‘negative list’

India is introducing a straightforward but powerful mechanism: a ‘negative list’ of countries where data transfers are prohibited. Unlike the GDPR’s ‘approved countries’ approach, this creates a more dynamic and potentially challenging environment for global marketing operations.

For instance, if a country ends up on this list, you will need to immediately redirect your data flows to approved destinations or process everything domestically.

Here is where things get interesting. If your organisation handles large volumes of personal data, you might be classified as a significant data fiduciaries (SDF).

The kicker?

SDFs must process and store data within India’s borders. This isn’t just a technical requirement—it is a fundamental shift in how we will need to structure our marketing technology stacks.

Consider this scenario: Your global marketing team currently uses a centralised customer data platform (CDP) located in Singapore to manage user profiles across Asia. Under the DPDP Act, if you are classified as an SDF, you will need to create a separate instance within India and carefully manage data flows between systems.

Impact on marketing activities

Running international campaigns? The landscape is changing. Every cross-border data transfer will need to be vetted against the negative list.

Let’s examine what this means in practice.

Imagine you are running a coordinated APAC campaign. Previously, you might have pooled user behaviour data from multiple countries to optimise your targeting.

Now, you will need to maintain separate data processing pipelines for Indian users, create region-specific analytics frameworks, and develop new workflows for sharing insights without transferring raw personal data.

The real-time bidding ecosystem faces particular challenges. When personal data must stay within India or requires explicit approval to leave, we are looking at potential disruptions to the split-second decisions that power programmatic advertising.

For example, a typical programmatic ad placement involves sharing user data with multiple demand-side platforms (DSPs), real-time analysis and bidding across global networks, and integration with international ad exchanges.

Under the DPDP Act, you must ensure that either your entire programmatic stack operates within India or you implement sophisticated data filtering mechanisms to comply with cross-border restrictions.

The days of freely aggregating data across borders are ending. Consider a typical customer journey analysis: A user researches their phone in India, gets retargeted while travelling in Singapore, and finally converts through their laptop back in India. Under the new rules, tracking this journey becomes significantly complex.

For such scenarios, as a marketer, you might need to maintain parallel analytics systems (one for India, one for globally), develop new attribution models that account for data separation, and create proxy metrics for cross-border customer behaviour.

Practical steps forward

There are some immediate actions that marketing teams can take to comply with new rules while achieving business objectives. For starters, they should audit their current data flows.

Map every instance where personal data crosses Indian borders. Check and assess if any processing activities may classify your organisation as a sensitive data fiduciary (SDF).

Also, document your current data storage locations and the mechanisms used for data transfers. This will give you a clear understanding of your current data practices and also help comply with the new DPDP regulations.

Examine your MarTech solution stack and identify the tools that can support data localisation. Locate the systems that may potentially be non-compliant and look for alternative solutions. Lastly, plan for probable infrastructure investments in India to ensure your technology complies with regulatory requirements and aligns with business goals.

Start by creating clear protocols for data classification, ensuring that all the enterprise data is accurately categorised based on its sensitivity and compliance demands. As the next step, define a plan for regular compliance audits to evaluate your organisation's adherence to new rules. This will also help you spot any gaps in your existing business processes.

Lastly, create incident response plans to plug any security vulnerabilities and potential breaches. This will be essential for you to prepare for any security threats, making sure that your organisation can minimise data privacy and security risks and respond with agility whenever required.

Long-term considerations

It may be beneficial to adopt a hybrid approach to data management. This may involve improving your IT infrastructure either by establishing data centres in India or utilising the services of Indian cloud service providers (CSPs). This will help you adopt a region-specific approach to data processing and storage.

Chalking out India-specific data processing workflows and crafting market-specific campaign methodologies will help you further align your data management systems with local requirements, and therefore, even the regulations.

On the process side, you will need to implement fresh approval workflows to streamline and compliant cross-border data sharing across countries and regions. It will be necessary to make separate data governance frameworks with detailed documentation trails suitable for Indian operations to ensure compliance with local and international laws and standards.

Building trust

The DPDP Act isn't just about compliance; it is an opportunity to build consumer trust. By embracing these changes, brands can demonstrate their commitment to consumer data privacy and protection, build stronger relationships with Indian consumers, and set new benchmarks for responsible marketing practices.

To illustrate, you can leverage compliance as a tool for competitive advantage by being transparent in your data handling practices. Creating India-specific privacy features within products and developing marketing campaigns that highlight your commitment to data sovereignty will help you comply with the new DPDP rules and create confidence about the brand in the minds of the consumers that you care about their information privacy needs.

The marketing landscape is evolving, and India’s DPDP Act is just the beginning. As marketing leaders, we must stay ahead of these changes while delivering effective campaigns. This means being proactive about compliance while finding innovative ways to achieve our marketing objectives.

The key to success will be flexibility and foresight. Those who adapt quickly and build robust, compliant systems will have a significant competitive advantage in one of the world’s most dynamic markets.

Remember: This isn’t just about following new rules—it is about embracing a new paradigm in data-driven marketing. Organisations that understand this and act accordingly will thrive in India’s evolving digital ecosystem.

— Vishal Kumar, CEO, LeapX