Quick Answer
When is a DPIA required under the DPDP Act? A Data Protection Impact Assessment (DPIA) is required under the DPDP Act 2023 when processing is likely to result in a high risk to the rights of data principals. Scenarios that typically require a DPIA include large-scale processing of sensitive personal data, systematic profiling of individuals, processing of children's data, deployment of new technologies that process personal data, and processing that could result in discrimination or significant harm. Significant Data Fiduciaries designated by the Central Government are required to conduct periodic DPIAs as part of their enhanced compliance obligations.
What is a DPIA under DPDP Act 2023?
A Data Protection Impact Assessment (DPIA) is a formal process to identify and minimise privacy risks before starting a new processing activity. Under India's Digital Personal Data Protection Act 2023, Significant Data Fiduciaries (SDFs) are required to conduct DPIAs under Section 10 before launching any new high-risk data processing operations. A DPIA documents the purpose, legal basis, risk assessment, safeguards, and consultation record for a given activity.
Who must conduct a DPIA in India?
Significant Data Fiduciaries — entities processing large volumes of personal data, sensitive data, or children's data — are mandated by Section 10 of the DPDP Act 2023 to conduct Data Protection Impact Assessments. Even organisations not yet classified as SDFs are strongly advised to conduct DPIAs for high-risk processing activities such as biometric data collection, children's data processing, cross-border data transfers, and automated decision-making systems.
What should a DPIA cover?
A comprehensive DPIA should cover: (1) a description of the processing activity and its purpose; (2) a data mapping exercise identifying data types, volumes, sources, and recipients; (3) a necessity and proportionality analysis; (4) a risk assessment matrix rating risks by likelihood and severity; (5) safeguards in place and planned; (6) consultation with the DPO and affected data subjects; and (7) a sign-off and review schedule. This tool covers all seven sections.
What happens if you don't conduct a DPIA?
Failure to conduct required DPIAs as a Significant Data Fiduciary can attract penalties of up to ₹150 crore under the DPDP Act 2023. Beyond financial penalties, the absence of a DPIA creates significant legal and reputational risk if a data breach occurs — regulators will assess whether a DPIA was conducted as part of their investigation. Proactive DPIAs are the most cost-effective way to demonstrate compliance and reduce penalty exposure.