DPDPA and Data Encryption: Meeting the 'Reasonable Safeguards' Threshold

Protecting personal data is a paramount obligation under India’s Digital Personal Data Protection Act, 2023 (DPDPA). The Act mandates that Data Fiduciaries must implement “reasonable security safeguards” to prevent personal data breaches. While the Act itself does not prescribe specific technical standards, data encryption stands out as a fundamental and widely recognized measure for safeguarding data confidentiality and integrity. The Draft DPDP Rules, 2025, further explicitly mention encryption as an example of an appropriate data security measure.

But what level of encryption meets the DPDPA’s “reasonable” threshold? This article delves into the role of encryption under the DPDPA, discusses key considerations for selecting and implementing encryption standards, and offers practical guidance for businesses.

Encryption as a “Reasonable Security Safeguard”

The DPDPA’s requirement for “reasonable security safeguards” implies a risk-based approach. The more sensitive the personal data and the higher the potential harm from a breach, the more robust the security measures, including encryption, should be.

Draft DPDP Rules offer a clearer indication by listing “appropriate data security measures, including securing of such personal data through its encryption, obfuscation or masking or the use of virtual tokens” as a minimum requirement. This signals a strong regulatory expectation that encryption will be part of a Data Fiduciary’s security arsenal.

Failure to implement reasonable safeguards, which would likely include appropriate encryption where warranted, can lead to significant penalties under the DPDPA, up to ₹250 Crore.

What Constitutes “Reasonable” Encryption? Factors to Consider

Since the DPDPA does not set explicit encryption standards (like specific algorithms or key lengths), “reasonableness” will likely be assessed based on several factors, including:

• Sensitivity of the Data: Highly sensitive personal data (e.g., financial information, health records, biometric data, passwords) will demand stronger encryption than less sensitive data.
• Volume of Data: Large datasets of personal data might attract more scrutiny regarding the robustness of their encryption.
• State of the Art: Using currently recognized, industry-accepted encryption algorithms and protocols. Obsolete or compromised encryption methods would not be considered reasonable.
• Nature of Processing and Risks: The context of data processing and the specific threats identified in risk assessments should inform encryption choices. For example, data transmitted over public networks requires strong in-transit encryption.
• Cost and Proportionality: While cost is a factor, it cannot be the sole justification for weak or no encryption, especially for sensitive data. The measures should be proportionate to the risks.

Key Aspects of Implementing Data Encryption for DPDPA Compliance

Data Fiduciaries should focus on several critical areas when implementing encryption:

1. Encryption of Data at Rest

This refers to protecting data stored on servers, databases, laptops, mobile devices, and backup media.

• Full-Disk Encryption (FDE): Encrypts the entire storage device. Useful for laptops and mobile devices.
• Database Encryption: Options include Transparent Data Encryption (TDE), column-level encryption, or application-level encryption for specific sensitive fields within a database.
• File and Folder Encryption: Encrypting specific files or folders containing personal data.
• Backup Encryption: Ensuring that all backups of personal data are also securely encrypted.

2. Encryption of Data in Transit

This involves securing data as it moves across networks, whether internal or external (e.g., the internet).

• TLS/SSL: Use Transport Layer Security (TLS) – the successor to Secure Sockets Layer (SSL) – for all web communications (HTTPS). Ensure you are using current, secure versions (e.g., TLS 1.2 or higher).
• VPNs (Virtual Private Networks): For secure remote access or connecting different network segments.
• Secure File Transfer Protocols: Use protocols like SFTP (SSH File Transfer Protocol) or FTPS (FTP Secure) for transferring files containing personal data.
• Encrypted Email: Consider end-to-end encryption for emails containing highly sensitive personal data.

3. Choosing Appropriate Encryption Algorithms and Key Lengths

• Industry-Standard Algorithms: Rely on well-vetted, strong cryptographic algorithms like AES (Advanced Encryption Standard) for symmetric encryption and RSA or ECC (Elliptic Curve Cryptography) for asymmetric encryption.
• Sufficient Key Lengths: Use key lengths that are considered secure against current and near-future computational capabilities (e.g., AES-256, RSA-2048 or higher).
• Avoid Deprecated/Weak Algorithms: Do not use algorithms known to be compromised or weak (e.g., DES, MD5 for hashing passwords, early versions of SSL).

4. Robust Cryptographic Key Management

Strong encryption is only as good as the security of its keys. Effective key management is critical:

• Secure Key Generation: Use cryptographically secure random number generators.
• Secure Key Storage: Protect encryption keys from unauthorized access using hardware security modules (HSMs), key management services (KMS), or other secure mechanisms. Do not embed keys directly in code or store them alongside the encrypted data without additional protection.
• Key Rotation: Regularly rotate encryption keys according to a defined policy.
• Access Control for Keys: Strictly limit access to encryption keys.
• Key Backup and Recovery: Have secure procedures for backing up and recovering keys in case of loss.

5. Application-Level vs. Infrastructure-Level Encryption

• Infrastructure-Level: Often provided by cloud providers or operating systems (e.g., encrypting an entire storage volume). This provides a good baseline.
• Application-Level: Encryption implemented within the application itself, providing more granular control over specific data fields. This can offer stronger protection, especially in multi-tenant environments. A defence-in-depth strategy often involves both.

6. Regular Review and Updates

• The cryptographic landscape evolves. Regularly review your encryption practices, algorithms, and key management processes to ensure they remain effective against emerging threats and align with current best practices.

Documenting Your Encryption Practices

As with all “reasonable security safeguards,” robust documentation is key to demonstrating DPDPA compliance. This should include:

• Your data classification policy (identifying sensitive data requiring encryption).
• Your encryption policy, detailing standards for data at rest and in transit.
• Details of implemented encryption technologies, algorithms, and key lengths.
• Your key management procedures.
• Results of security audits or assessments that cover encryption effectiveness.

Conclusion: Encryption as a Foundational DPDPA Safeguard

While the DPDPA 2023 does not mandate specific encryption algorithms or ciphers, the explicit mention of encryption in the Draft DPDP Rules as a security measure, combined with the overarching requirement for “reasonable security safeguards,” makes its appropriate implementation a near necessity for protecting personal data, especially sensitive categories.

Data Fiduciaries must adopt a risk-based approach, choosing encryption methods and strengths proportionate to the sensitivity of the data they process and the potential harm from a breach. Robust key management is equally vital. By implementing strong, industry-standard encryption for data at rest and in transit, and diligently documenting these measures, businesses can take a significant step towards meeting their DPDPA obligations and protecting the personal data entrusted to them.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. The content is based on the Digital Personal Data Protection Act, 2023, and the Draft DPDP Rules, which are subject to change. For advice on specific legal issues, please consult a qualified legal professional.