B2B, but with boundaries: Managing privacy compliance in inter-enterprise data sharing

With more than 850 million Indians online, every click, tap, and payment adds to an ever-growing trove of electronic transaction histories. People are beginning to leverage this personal data, digital payment trails, insurance details, health and education records, to unlock life-changing opportunities such as loans, medical care, or new jobs. Seamless institution-to-institution, or business-to-business (B2B), data exchange is the engine behind these services: when someone applies for a loan, a bank typically consults credit-bureau files, telecom usage data, and e-commerce purchase histories.

McKinsey’s global analytics survey found that mature data-governance ecosystems enjoying robust collaboration reported a 9 to 15 per cent uplift in revenue and customer satisfaction. Yet meaningful safeguards are vital; data owners must retain decisive control to prevent fraud or abuse. The Digital Personal Data Protection Act 2023 (DPDPA) aims to deliver such lawful, purpose-bound sharing while upholding each Data Principal’s rights and organisations must now navigate its demands.

The Compliance Landscape

The DPDPA 2023 supersedes the SPDI Rules 2011, creating a new architecture anchored by a Data Protection Board and enforceable Data Principal rights. Key requirements for any personal-data transfer include:

1. Consent-based processing – Personal data may be handled only for lawful purposes backed by clear, specific, and informed consent.
2. Data-fiduciary obligations – Organisations must deploy suitable security measures, ensure data accuracy, and inform individuals how shared or third-party data will be used.
3. Cross-border flow rules – The government can designate nations where transfers are permitted or barred.
4. Significant Data Fiduciaries (SDFs) – Entities that handle sensitive or high-volume data face enhanced obligations once so classified.
5. Penalties – Non-compliance, such as failing to secure data or obtain consent, can trigger fines up to Rs 250 crore.

Both intra-group transfers and third-party B2B arrangements must be re-evaluated under these rules.

Data Sharing in B2B Models: Practical Compliance Challenges

1. Data monetisation partnerships – FinTech players passing user information to credit bureaus or marketing firms must collect explicit consents and keep shared data accurate, complete, and consistent; even pseudonymised sets may still count as personal data if identities can be reasonably inferred.
2. Joint ventures and strategic alliances – When, say, an insurer teams with a health-app provider, each partner’s role must be mapped: if a partner determines processing purposes, it becomes a separate Data Fiduciary and must secure consent directly. Service-based collaborations should be governed by Data Processing Agreements that spell out security, breach-notification, and rights-management clauses.
3. Third-party processors and vendors – Cloud, CRM, or analytics suppliers acting as Data Processors require detailed DPAs setting out roles, security standards, subcontracting limits, and cross-border rules.
4. Data lakes and shared repositories – Conglomerate-wide data lakes mean each subsidiary’s status—processor or fiduciary—must be clearly delineated so obligations under Section 8 and data-rights mechanisms are met.

A Compliance Framework for B2B Data Sharing

A robust compliance framework begins with thorough data discovery and classification, creating an exact inventory that tracks what information is collected, where it resides, with whom it is shared, and whether it is sensitive. From there, consent and purpose governance take centre stage: organisations must use granular consent-management platforms, limit processing strictly to declared purposes, and honour any withdrawal requests throughout the data-sharing chain. These measures rest on solid contractual and operational controls, which require updating all third-party agreements with DPDPA-mandated clauses, embedding privacy-by-design (and by default) principles, and routinely auditing partners to ensure cyber-resilience. Underpinning everything is accountability and governance—appointing a Data Protection Officer where mandated, establishing data-sharing governance boards, maintaining detailed Records of Processing Activities, and performing Data-Protection Impact Assessments for high-risk use cases.

Future Outlook and Strategic Recommendations

Looking ahead, organisations should prioritise value over volume by focusing on datasets with clear analytical or monetisation potential rather than collecting or sharing information indiscriminately. Investment in privacy-enhancing technologies such as consent-governance tools, data catalogues, federated learning, homomorphic encryption, and differential privacy, will be key to enabling compliant innovation. Companies must also adopt a sectoral view, layering industry-specific requirements like RBI and IRDAI localisation norms on top of baseline DPDPA obligations. Above all, fostering ecosystem trust is essential: going beyond mere compliance by respecting purpose limitations and minimising data collection will help build lasting credibility.

Conclusion

India’s data-driven B2B economy is on the cusp of explosive growth powered by AI and digital platforms, but the DPDPA rewrites the rulebook. Privacy is now both a strategic differentiator and a reputational imperative. Enterprises that embed privacy at the heart of every data partnership, leverage emerging technologies responsibly, and safeguard the trust of individuals and collaborators will set the pace for India’s digital decade.

– Puja Deshpande, Head—Privacy Implementation, IDfy

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