Exchange4media, March 10, 2025
As the Indian government extended the consultation period for the draft Digital Personal Data Protection (DPDP) Rules to March 5, 2025, stakeholders across the digital landscape seized the opportunity to voice their concerns and suggestions on these crucial regulations.
The draft rules, initially released on January 3, 2025, aim to operationalize the DPDP Act passed in August 2023, addressing key areas such as consent management, data localisation, and data breach notification. This extension reflects the government’s commitment to engaging with a broad spectrum of stakeholders, ensuring that all viewpoints are heard before finalizing these regulations.
India’s advertising industry is projected to reach a market size of 1.07 lakh crore in 2025, according to the dentsu-e4m Advertising Report. Digital advertising continues to dominate, accounting for a significant portion of the total ad spend, driven by innovations in technology and changing consumer behaviours.
Ankit Sahni, Partner at Ajay Sahni & Associates, underscores the challenges faced by smaller tech companies in navigating these regulations. “For smaller, homegrown tech companies, navigating DPDP rules might appear less daunting initially due to their agility and local market understanding. However, the lack of financial resources and legal expertise to implement robust compliance measures may expose them to a greater risk of non-compliance,” he explains.
Sahni also notes that multinational corporations (MNCs), while facing adaptation challenges due to the DPDP’s departure from GDPR, have the advantage of resources to build or overhaul infrastructure. He emphasises that, “the true test will come as companies of all sizes await judicial clarity on how the Act’s provisions will be enforced in practice.”
The digital advertising segment is projected to grow significantly, with the dentsu-e4m Advertising Report indicating a market size of 59,200 crore by the end of 2025. This growth is driven by sectors such as e-commerce, BFSI, and FMCG, which are increasingly leveraging digital platforms to connect with audiences. The Pitch Madison Advertising Report 2025 also highlights the rapid growth of digital media, with digital advertising expected to play a pivotal role in the industry’s expansion.
Krishaank Jugiani, Senior Associate at CUTS International, highlights concerns about how regulatory changes could impact innovation in digital spaces for children. “The current draft of the Rules offers a narrow approach to handling children’s data, which could stifle innovation. The proposed Verifiable Parental Consent (VPC) mechanisms may not be the most effective when considering factors like cost, privacy, and efficiency,” he notes.
Jugiani warns that rigid approaches could disproportionately affect low-income families and push platforms toward costly subscription models. His research reveals that compliance costs for small platforms could reach $120,000 annually-expenses likely passed on to consumers.
Regulatory Challenges and Industry Growth
It’s notable that several experts spoken to by this reporter, and who only commented on the condition of anonymity, said the same thing. To wit, “The term data fiduciaries needs to be re-examined, and indeed, perhaps rethought, given the interwoven nature of data providers, data users, and the platforms that said data is used on.”
NASSCOM in fact issued a statement to the same affect, in part saying, “The new proposal in the Draft Rules to restrict cross-border transfers for Significant Data Fiduciaries (SDF) appears inconsistent with the spirit and objectives of the Act and should be reconsidered. Moreover, the ability of such a restriction to afford meaningful additional safeguards to the processing of personal data remains, at best, questionable.”
And indeed, the DPDP Act and its draft rules introduce enhanced privacy protections but pose significant compliance challenges for businesses across industries. As companies await judicial clarity on how the Act’s provisions will be enforced in practice, balancing innovation with regulatory compliance will remain a pressing concern.
Roland Landers, CEO of the All India Gaming Federation (AIGF), appreciates the consultative approach taken in shaping these regulations, saying, “The DPDP Act and Rules are a significant regulatory development that will require substantial operational changes for businesses. We appreciate the consultative approach taken in shaping these regulations and look forward to actively participating in the stakeholder engagement process. Landers emphasises that balancing data protection with sustainable growth is crucial for industries like gaming.
Jugiani advocates for a risk-based regulatory approach that allows flexibility in VPC methods while enabling interoperability between platforms, noting, “This would reduce compliance burdens and prevent consent fatigue for parents while fostering safer digital spaces for children.” His advocacy underscores the need for a nuanced approach to handling children’s data, one that balances privacy concerns with the need for innovation.
The growth of digital advertising is not without its challenges. As the market matures, brands are focusing on strategic digital investments rather than experimental approaches. Newer brands are leveraging social influencers and diverse networks to build brand awareness, moving away from traditional celebrity endorsements. The dentsu-e4m Advertising Report highlights that digital media has emerged as the largest contributor to advertising špends, accounting for 49% of the Indian advertising industry.
In the broader context, India’s digital media landscape is witnessing rapid expansion, driven by increased internet penetration and smartphone adoption. The country’s digital advertising market is expected to continue its upward trajectory, with digital platforms becoming essential for businesses looking to reach their target audiences effectively.
As India’s advertising landscape continues to evolve, it is clear that digital media will remain at the forefront of growth. The integration of Al and data-driven strategies will be crucial for companies looking to maximise their advertising impact. However, navigating regulatory challenges such as the DPDP Bill will require careful planning and-compliance. Industry leaders must balance innovation with regulatory adherence to ensure sustainable growth while safeguarding consumer data.
In conclusion, India’s advertising industry is poised for significant growth in 2025. driven primarily by digital media. However, the path forward will be shaped by how effectively companies navigate the dual imperatives of innovation and compliance. As the industry continues to evolve, it will be crucial to strike a balance between technological innovation and regulatory compliance, ensuring that India’s digital advertising sector remains vibrankand competitive.
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