The Digital Personal Data Protection (DPDP) Rules, 2025 are more than a regulatory milestone, they represent a cultural shift for India’s digital ecosystem. They demand data ethics, transparency and accountability from day one. Startups will need to move past checkbox compliance and build systems that respect consent and secure personal data.
For many early-stage companies, that may feel like a tall order because compliance means systems, new talent and new costs. “But this is also the inflection point,” said CP Gurnani, co-founder & vice-chairman, AIONOS. “Every major regulatory change in history has created a new generation of winners, those who innovate ahead of compliance, not in reaction to it.”
The DPDP regime opens doors to new markets and innovation: from privacy-by-design products and AI-based consent platforms to regulatory automation and business continuity tools tailored for this new compliance era. The phased rollout allows the runway to adapt and build with integrity.
What did Amit Relan say?
“At the same time, the compliance burden is real,” said Amit Relan, CEO and co-founder of mFilterIt. Startups will need to implement tighter data-handling processes, establish consent frameworks, invest in security technologies, and embed privacy-by-design into their products from day one. Another important aspect is the integrity of the data being collected.
In a digital economy where a portion of interactions may come from non-genuine sources, ensuring that incoming signals are authentic becomes essential. Startups that focus on both – privacy and integrity – will be better positioned to build trust, differentiate themselves, and scale responsibly in this new regulatory era.
What did Vijendar Yadav say?
The notification of the DPDP Rules creates a profound duality of challenge and opportunity, feels Vijender Yadav, co-founder and CEO of Accops. The immediate challenge is achieving continuous compliance within the 18-month window despite resource constraints. This requires startups to move away from fragmented data handling and set up a single, centralised layer of control, enabling consolidation and centralisation of personal data for a unified compliance approach.
“However, this investment transforms risk into an asset,” said Yadav. By integrating stringent security measures – particularly through virtualisation that makes endpoints dumb and foundational technologies like Zero Trust Network Access (ZTNA) and Identity and Access Management (IAM) – startups gain instant compliance maturity.
The resource constraints can be managed through a phased, risk-based approach, according to Shrikrishna Dikshit, partner – Digital and Cyber Security, Baker Tilly ASA. Prioritising high-risk data flows, implementing scalable consent frameworks, and adopting lightweight DPIA templates can deliver early wins. Leveraging cloud-native privacy platforms, automation, shared services, and partnerships with specialised vendors reduces complexity and cost.
Startups are still at an early stage of preparing for the new regime despite the 18-month window for compliance. Only about a quarter of them have built basic systems for data protection, while most still need more than a year to fix older setups, said Srinivas Padmanabhuni, CTO, AIEnsured. “Startups in sectors like BFSI, IT, and SaaS are ahead because they already follow GDPR-style and KYC rules. However, consumer, D2C, and healthtech startups are moving slower due to poor governance, fragmented data handling, and a lack of internal privacy knowledge.”
With the rules mandating prompt breach notification (to users clearly, and to the Data Protection Board within 72 hours), startups must build or upgrade their incident-response and reporting workflows immediately. They also need to map data flows end-to-end and introduce granular consent notices outlining exactly what is collected and why, per the explicit notice requirements. For firms likely to be classed as “Significant Data Fiduciaries,” there’s now a recurring mandate of annual DPIAs and privacy audits, plus checks on algorithms to make sure they don’t threaten user rights, said Subeer Sehgal, head AI & Data Governance, Fractal Analytics.
The rules also force a real rethink on data retention: certain entities must delete user data after 3 years and notify users 48 hours before deletion. “While the phased rollout gives breathing room, but the learning curve is steep – those who embed privacy in engineering, product, and governance early will come out more resilient and trustworthy,” he added.
According to Narinder Kumar, co-founder & CEO, TO THE NEW, a digital technology services firm, the DPDP rules open up a clear opportunity for startups to use privacy as a competitive edge. In a saturated digital landscape, demonstrating clean consent flows, minimal data collection, and transparent communication can instantly build user trust.
The primary challenge will be operational discipline: mapping data flows, tightening access controls, meeting breach-reporting timelines, and maintaining processing logs. Many early-stage companies have prioritised speed over structure, so this transition will require a more mature approach to data governance.
Paramdeep Singh, co-founder of Shorthills AI, believes that startups should view the DPDP Rules as a business opportunity. Since only a few companies can build their own privacy technology, the demand for compliance-as-a-service and simple, plug-and-play solutions will surge. When it comes to readiness, there is a sure upfront investment for companies and also an inherent engineering rethink involved where compliance is not an afterthought, but weaved into processes from the word go. “But I also see it as a change that will lead startups to evolve fast,” he summarised.