Data Privacy & Protection in HealthTech: An Indian Legal Framework Overview

India’s healthcare ecosystem is rapidly undergoing digital transformation. From AI-driven diagnostics to wearable health monitors, the future of healthcare is undeniably tech-enabled.

Yet, as data becomes central to innovation and delivery, the need for robust legal safeguards around its usage has never been more critical.

The enactment of the Digital Personal Data Protection Act (DPDPA) in 2023 marked a pivotal step toward data governance in India. However, when it comes to healthcare, where data is not just personal but deeply sensitive, the question remains: Is the DPDPA enough?

DPDPA: A Step Forward, But Not the Destination

The DPDPA is the first formal attempt to create a structure for handling personal data in India. It raises essential questions for all data-driven industries, including healthcare:

• Why is this data collected?

• How is it stored and processed?

• What governance models exist for its use and eventual deletion?

In the HealthTech sector, these questions are not theoretical. They shape business models and influence clinical outcomes. Forward-looking digital health startups already align with these mandates, embedding privacy-first frameworks into their tech architecture.

However, the bigger challenge lies with traditional healthcare providers—hospitals, clinics, and diagnostic chains—where digital transformation is still nascent. Many are just beginning their journey of data discovery and compliance, making the enforcement of DPDPA uneven across the ecosystem.

The act does more than check compliance boxes. It nudges healthcare players to turn dormant data assets into strategic tools, helping improve diagnosis, prognosis, and long-term care. In this way, DPDPA is both a compliance challenge and an innovation catalyst.

The Case for a Sector-Specific Law: Why Healthcare Needs More

While DPDPA lays a broad foundation, experts argue that India urgently needs a healthcare-specific data protection law.

The reasoning is simple: Healthcare data is unique in its sensitivity, risk exposure, and societal impact.

In the US, laws like the Health Information Technology for Economic and Clinical Health (HITECH) Act, the Health Insurance Portability and Accountability Act (HIPAA), and proposed frameworks like the Health Infrastructure Security and Accountability Act (HISAA) offer more targeted protections. They enforce mandatory cybersecurity standards, enable regular audits, impose stringent penalties for non-compliance, and even support under-resourced providers with financial and technical assistance.

In contrast, India’s healthcare data landscape is governed by a fragmented regulatory patchwork:

• The IT Act (2000)

• SEBI’s LODR regulations (for listed health entities)

• Guidelines from CERT-IN

Each offers limited coverage and fails to address healthcare-specific threats like ransomware attacks on hospitals, misuse of genetic data, or AI algorithmic bias in clinical decision-making.

The proposed Digital Information Security in Healthcare Act (DISHA) attempted to plug this gap, but despite initial consultation rounds in 2018, the bill hasn’t seen parliamentary light. A strong, dedicated framework built atop the DPDPA is not just desirable, it’s indispensable.

Striking the Balance: Privacy, Innovation & Real-Time Care

One of the thorniest dilemmas in digital health is balancing patient privacy with the demand for real-time, data-driven care.

Data is the fuel for AI, machine learning, and predictive diagnostics. However, poorly governed data can lead to privacy breaches, trust deficits, and ethical concerns. The solution lies not in choosing one over the other but in building a system where privacy and innovation go hand in hand.

Here’s how that balance can be achieved

Differentiated Access Control:

Real-time clinical data can be shared for immediate care under explicit consent frameworks, while aggregated, de-identified data can power R&D and innovation.

Collaborative Governance:

HealthTech startups, already privacy-forward, can partner with legacy healthcare institutions to implement best practices. Such collaborations can create a hybrid ecosystem that leverages scale and agility.

Regulatory Guardrails:

A proactive regulator must guide the sector, issuing frequent updates on data handling, cybersecurity norms, and ethical AI use in clinical environments.

India is on the cusp of a digital healthcare revolution, and collaboration between regulators, Health Tech companies, and traditional providers will be critical. Trust is the new currency in digital health, and privacy is its most valuable reserve.

Conclusion

The Digital Personal Data Protection Act is a timely, necessary reform, but not the complete answer to India’s healthcare data conundrum. As technology deepens its imprint on care delivery, the legal framework must evolve in step, acknowledging the nuanced realities of healthcare data.

A sector-specific law, robust public-private collaboration, and a clear roadmap for cybersecurity, consent, and ethical data usage are vital to building a privacy-first, innovation-driven healthcare system in India.

Until then, the industry must tread carefully, guided by regulatory foresight and ethical responsibility.