Introduction
The implementation of the Digital Personal Data Protection (hereinafter referred to as “DPDP”) Act, 2023, will be significantly transforming the landscape of data governance for Indian organizations, with a particular focus on safeguarding personal data in compliance with global standards. For procurement and legal teams, vendor due diligence has emerged as a strategic priority, especially given the legal liabilities and reputational risks associated with third-party data processing.
The Act not only mandates robust internal controls but also emphasizes contractual safeguards, process transparency, and ongoing oversight, making vendor risk management a core component of organizational compliance frameworks. Asking the right questions to your vendor, targeting specific, measurable, and verifiable responses ensures organizations can assess, compare, and monitor vendor compliance effectively, thereby reducing the risk of breaches, penalties, and trust erosion.
What You Need to Ask (and Know)
- Are you familiar with India’s Digital Personal Data Protection Act (DPDPA), 2023?
- Do you have a designated personnel or point of contact for Data Privacy related matters?
- Can you share your privacy policy?
- What types of personal data do you collect, process, or store for or from us
- Do you process any sensitive personal data?
- Do you obtain consent from data principals before collecting their data?
- Can data principals withdraw consent easily from your systems?
- How do you verify the age of data principals for consent, especially minors? (if applicable)
- Do you inform data principals about the purpose of data collection?
- Do you limit data processing to only the stated and agreed purposes?
- How do you ensure data accuracy and completeness?
- What security measures do you have to protect personal data internally?
- Do you conduct regular data protection impact assessments (DPIAs) or audits?
- What is your data breach notification process?
- How soon can you notify us and the Data Protection Board about a breach?
- Do you transfer personal data outside India? If yes, to which countries?
- How do you ensure compliance for cross-border data transfers?
- Can you delete or anonymize data upon request?
- How long do you retain personal data?
- What procedures are in place for data access and correction requests?
- Do you subcontract any data processing activities?
- Do you have data processing agreements with all sub-processors?
- How do you monitor and ensure sub-processor compliance with DPDPA?
- Have you trained your employees on data protection and DPDPA requirements?
- Do you keep records of all data processing activities?
- Can you demonstrate compliance with DPDPA if audited later?
- Have you been subject to any data protection investigations or penalties? (if applicable)
- Do you provide mechanisms for individuals to file grievances or complaints?
- Are you able to assist us in fulfilling our DPDPA obligations when required?
- Will you promptly inform us about any changes to your data processing practices or policies?
AMLEGALS REMARKS
A robust vendor due diligence framework under the DPDP Act is essential for procurement and legal teams to manage third-party risks effectively. By focusing on clear, targeted questions and demanding verifiable evidence, organizations can distinguish compliant vendors from those that pose privacy and security risks. The structured approach covering governance, data handling, security, rights management, and contractual safeguards enables organizations to demonstrate accountability, reduce regulatory exposure and foster trust in their vendor ecosystems.
Regular monitoring is critical to maintain compliance as regulations evolve. Embedding these practices into procurement and vendor management processes ensures that organizations remain resilient and responsive to both emerging threats and regulatory changes. Ultimately, a well implemented due diligence process not only mitigates legal and reputational risks but also strengthens the foundation for safe and scalable vendor partnerships in India’s digital economy.
In case of any query, please feel free to reach out to us at mridusha.guha@amlegals.com