What are the rules for storing and transferring personal data outside India?

Question

My company uses a foreign cloud provider to store customer data and I want to know what the law requires for cross-border data transfer. Before I spend money on it, I want to know whether Digital Personal Data Protection Act 2023, Section 16 gives me a remedy here and what proof I would need. Any Section numbers I can quote when I write to them would be useful.

MyVakeel Legal Desk · Accepted Answer

Digital Personal Data Protection Act 2023, Section 16, Information Technology Act 2000, Section 43A, RBI Storage of Payment System Data Directions 2018 and CERT-In Directions 2022, Direction 4 is what decides this question in India. Read it alongside the provisions named, because the relief available to you turns on the facts you can prove on paper.

Section 16 of the Digital Personal Data Protection Act 2023 permits transfer of personal data outside India except to countries specifically restricted by the Central Government through notification.

Unlike the earlier draft law, the current framework does not mandate blanket data localisation, but sector-specific regulators can impose their own storage requirements.

Payment system data must be stored only in India under the RBI's Storage of Payment System Data Directions 2018, requiring full transaction data to be maintained within Indian systems even if a foreign processor is involved.

A body corporate handling sensitive personal data through a foreign cloud provider remains liable for negligent security practices under Section 43A of the Information Technology Act 2000 regardless of where the servers are located.

Direction 4 of the CERT-In Directions 2022 requires service providers to maintain logs of their ICT systems for one hundred and eighty days within India to assist in incident investigation.

In practice, in this order: 1) Check whether the destination country is on any restricted list notified under the DPDP Act; 2) Verify sector-specific localisation requirements applicable to your business, such as RBI's for payment data; 3) Ensure the cloud contract includes data protection and audit clauses consistent with Indian law; 4) Maintain mandated logs within India as required under the CERT-In Directions.

Timing matters here: Digital Personal Data Protection Act 2023, Section 16 works on limitation periods, so a data localisation india claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in cyber law.