In a world increasingly driven by data, the release of India's Digital Personal Data Protection Rules, 2025 was seen as an opportunity to place the country at the forefront of global privacy governance. Instead, these rules have done the opposite. By clinging to outdated, centralized control mechanisms such as the "Consent Manager," India risks alienating itself from the global digital economy. The law is a missed opportunity to embrace innovative, decentralized, and privacy-first solutions that align with the needs of a globalized world.
This article is a response to the Explanatory note to Digital Personal Data Protection Rules, 2025 released by the government of India in English.
Centralized Consent Managers: An Outdated Model
The centerpiece of the new law, the Consent Manager, embodies everything wrong with India’s approach to personal data protection. By mandating that Consent Managers must be Indian-incorporated entities with a minimum net worth of ₹2 crores, the government has created a system that is exclusionary, bureaucratic, and disconnected from global realities.
The centralized Consent Manager model forces individuals to rely on intermediaries to manage their data permissions. While ostensibly created to enhance transparency and accountability, it adds layers of complexity and inefficiency. Moreover, it creates a government-mandated oligopoly, leaving smaller companies, startups, and global players with no viable entry point. This approach is a step back from empowering individuals to directly manage their data, which is a core principle of modern privacy governance.
Missed Opportunity for Decentralization
In a digital world increasingly reliant on decentralized technologies, India’s insistence on centralized control feels out of place. Decentralized consent mechanisms, built on technologies like blockchain and zero-knowledge proofs, offer a more forward-looking and user-empowering alternative. These systems allow users to control their data directly, ensuring privacy and transparency without the need for a central intermediary. By ignoring these advancements, India’s framework remains rooted in a paradigm that the rest of the world is already moving beyond.
Global Data Flows vs. National Barriers
The law’s insistence on forcing foreign businesses to incorporate in India as Consent Managers demonstrates a failure to understand the global nature of data. Cross-border data flows are the lifeblood of the modern digital economy. Creating national barriers in a bid to assert control does little to protect users and much to discourage foreign investment, hampering India’s ambitions to be a global tech leader.
First-Party Solutions: The Real Path to Privacy
The Power of First-Party Data
First-party data solutions, where businesses collect and manage data directly from their users, are not only more privacy-centric but also far more efficient. By eliminating reliance on third-party intermediaries, first-party solutions ensure better data quality and stronger compliance with global privacy standards like the GDPR.
For India, promoting first-party data collection would have been a golden opportunity to lead the charge in privacy innovation. Instead, the new rules fail to encourage this shift, sticking to a centralized model that reinforces reliance on middlemen and undermines the potential for genuine user empowerment.
A Privacy-First Ecosystem
Globally, businesses are moving toward first-party solutions to build trust and comply with privacy regulations. India’s failure to prioritize this shift will leave its businesses struggling to meet international standards and missing out on the competitive advantages that first-party privacy practices offer.
Decentralized Data Ownership: A Vision for the Future
Empowering Users with Decentralized Systems
The future of data lies in decentralized identity systems (DIDs) and self-sovereign identities, where individuals own and control their data directly. These systems, powered by blockchain and similar technologies, allow users to grant or revoke access to their data across platforms without relying on a central intermediary. Decentralized models also enhance transparency, ensure compliance, and reduce the risks associated with data breaches.
By mandating centralized Consent Managers, India’s rules completely sideline this transformative approach. Instead of empowering users, they create an architecture of dependence that is at odds with the ideals of data sovereignty and privacy.
Learning from Global Trends
Across the world, governments and organizations are embracing decentralized frameworks. For instance, the European Union’s GDPR encourages privacy-by-design principles, while blockchain-based identity solutions are being piloted globally. India’s reluctance to align itself with these trends risks leaving it isolated in the global digital economy.
Policy Implications: What This Means for India
A Bureaucratic Bottleneck
The centralized Consent Manager model creates unnecessary bureaucratic hurdles, increasing compliance costs for businesses and stifling innovation. This approach will deter foreign companies from engaging with India’s digital economy and slow down the country’s transition to a privacy-first future.
Global Isolation
By focusing on centralized mechanisms and ignoring the reality of cross-border data flows, India risks alienating itself from global data ecosystems. The insistence on forcing foreign Consent Managers to incorporate in India will likely lead to conflicts with international privacy frameworks, further isolating the country.
A Better Way Forward: Recommendations
Promote First-Party Data Collection:
- Encourage businesses to adopt first-party data solutions, reducing reliance on third-party intermediaries and centralized control mechanisms.
- Provide incentives for companies that implement privacy-by-design practices.
Embrace Decentralized Consent Models:
- Explore decentralized technologies like blockchain to enable user-controlled consent mechanisms.
- Pilot programs for decentralized identity systems to demonstrate feasibility and scalability.
Align with Global Standards:
- Harmonize India’s privacy framework with international standards like GDPR and the ePrivacy Directive to facilitate cross-border data flows and attract global investment.
- Create a privacy ecosystem that prioritizes user empowerment over government control.
Conclusion: A Call to Rethink
The Digital Personal Data Protection Rules, 2025, were a chance for India to lead the world in privacy innovation. Instead, they represent a missed opportunity to embrace decentralized solutions and first-party data practices that could have empowered individuals and businesses alike. By clinging to centralized models and ignoring global trends, India risks falling behind in the digital age.
The time to course-correct is now. India must revisit its approach, placing users, not bureaucracies, at the heart of its data protection framework. Only then can it truly claim to be a leader in the global digital economy.
Ronni K. Gothard Christiansen // VikingTechGuy
Creator, AesirX.io
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