DPDP Rules Push Major Rise in IT Spending as Enterprises Upgrade Data Privacy Systems and Strengthen Cybersecurity Compliance

The rollout of the Digital Personal Data Protection (DPDP) Rules is pushing Indian companies toward a major technology upgrade. Over the next 12–18 months, businesses will need to redesign how they collect, store and manage personal data, which is expected to increase IT and tech spending by 10–30%. This shift is happening across organisations of all sizes as they prepare for new compliance standards.

Since the government has formally announced the DPDP Rules, businesses must begin changing their systems. This involves enhancing data consent processes, modernizing data retention systems, implementing mandated breach reporting mechanisms, and enabling features that give users control over their personal data. These changes will affect not only technology teams, but also legal and operational departments, making compliance an even bigger responsibility than before.

Technology upgrades form the biggest part of this transformation. Organisations are now reviewing their entire data ecosystem, from data consolidation to consent-management tools, stronger cybersecurity frameworks, and redesigned backend systems. Businesses with scattered or outdated systems may require a major rebuild to meet DPDP standards.

Medium-sized and small businesses (SMEs) are expected to take on most of the financial effect. Experts predict that SMEs will suffer a 25-30% increase in technology spending, particularly if they need to replace their core architecture. Larger organizations with existing reliable data systems may still see a 10-15% rise. Many businesses will rely extensively on outsourced cybersecurity and data protection service providers, particularly if they lack internal teams to oversee the shift.

Another significant cost comes from data mapping and data audits. Until now, structured data audits were not common in India, but under DPDP, they will become mandatory. This makes it another recurring expense, especially for smaller firms that need to build everything from scratch.

Legal and regulatory expenditures are also increasing. Startups, in particular, are expanding their legal costs, as compliance has become critical to investor confidence and business collaborations. Early-stage businesses currently spend approximately 15-20% of their legal expenditure on DPDP compliance, whereas growth-stage startups spend 25-30%, particularly when selling to large corporations.

While the upfront spending seems high, experts believe the long-term benefits will be significant. Stronger data practices can reduce privacy disputes, strengthen customer trust, and lower the risk of data breaches. As India moves toward a more secure digital ecosystem, DPDP is setting the foundation for safer and more transparent data governance.

Information referenced in this article is from Financial Express