GDPR: EU’s stringent data rules and what Indian companies must know

In today’s US$ 3 trillion global digital economy, data is as valuable as the goods shipped across borders. With over 60% of cross-border trade involving personal data, the risk of misuse and breaches is higher than ever. To address this, the EU introduced the General Data Protection Regulation (GDPR) in 2018, the world’s toughest privacy law.

For Indian exporters—who supply IT services, pharmaceuticals, textiles, and food products worth over US$ 75 billion annually to the EU—its extraterritorial scope is unavoidable. Non-compliance not only risks penalties of up to €20 million or 4% of turnover but also threatens credibility and long-term market access.

In the global digital economy, data is as critical as physical goods. It drives supply chains, enables cross-border transactions, and sustains trust in business relationships. Yet, as data has become a central asset, concerns about its misuse and breaches have multiplied. To safeguard personal data, the European Union (EU) introduced the General Data Protection Regulation (GDPR) in May 2018, setting the toughest privacy standards in the world.

While designed for EU citizens, GDPR’s extraterritorial scope means that it directly impacts Indian businesses—especially exporters that deal with European buyers, distributors, or consumers. For these companies, GDPR compliance is not just a regulatory checkbox, but a business necessity that can determine credibility, trust, and long-term market access.

What is GDPR?

The General Data Protection Regulation (GDPR) is a sweeping EU law that governs how personal data is collected, processed, and stored. Its reach extends beyond Europe, applying to any company worldwide that handles the personal data of EU citizens or residents.

Key principles of GDPR

• Lawful basis for processing: Data can only be processed with consent, contract necessity, legal obligation, vital interests, public task, or legitimate interest.
• Extraterritorial scope: Any Indian exporter dealing with EU residents’ data—through contracts, websites, or marketing—falls under GDPR.
• User rights: EU individuals have rights to access, rectify, erase, restrict, and port their data, and to object to processing.
• Data minimization: Only collect data necessary for the stated purpose.
• Cross-border transfers: Allowed only if the destination ensures adequate protection or uses Standard Contractual Clauses (SCCs).
• Enforcement: Fines can reach €20 million or 4% of global annual turnover—whichever is higher.
• Independent regulators: Each EU member state enforces compliance through Data Protection Authorities (DPAs).

How GDPR Impacts the Indian exporters

India is one of the EU’s largest trading partners, exporting IT services, pharmaceuticals, textiles, food products, and more. Nearly all Indian exporters interact with EU buyers or platforms in ways that involve personal data—emails, addresses, or financial details—making GDPR compliance critical. The upcoming India-EU Free Trade Agreement (FTA), expected by the end of 2025, promises to boost India’s exports by improving market access, reducing tariffs, and opening opportunities in key sectors such as agriculture, wine, dairy, and manufactured goods. However, the EU’s stringent General Data Protection Regulation (GDPR) remains a hurdle.

Without ‘adequate’ status, Indian companies face restrictions on transferring personal data, increasing compliance costs and potentially limiting access, especially for IT, e-commerce, and digital services. Even though exporters operate outside the EU, GDPR applies the moment they process EU citizens’ data, making robust compliance essential to fully capitalize on the FTA’s trade opportunities.

1. Customer Data Collection & Consent

Exporters often gather details like names, phone numbers, addresses, and payment information of EU customers, buyers, or distributors. Under GDPR:

• Explicit consent is required—no pre-ticked boxes or vague disclaimers.
• Exporters must clearly explain why data is being collected and how it will be used.
• Customers must have the option to withdraw consent at any time.

2. Contracts and B2B Transactions

Even in B2B exports, Indian firms may handle personal details of EU employees (emails, phone numbers). This counts as personal data. GDPR requires exporters to:

• Sign Data Processing Agreements (DPAs) with EU partners.
• Define responsibilities for safeguarding data in contracts.

3. Marketing and Outreach

Email campaigns, newsletters, and digital promotions are common tools for exporters. GDPR requires:

• GDPR-compliant opt-in consent for communications.
• Easy unsubscribe options in every email.
• Respect for “right to be forgotten” requests.

4. Websites and Digital Platforms

If an Indian exporter’s website is accessible in the EU, GDPR rules apply. Requirements include:

• A GDPR-compliant privacy policy explaining data use.
• Cookie consent banners if tracking user behavior.
• Ensuring third-party tools like Google Analytics or CRM software also comply.

5. Data Storage and Security

Exporters are responsible for keeping EU data safe. GDPR demands “appropriate technical and organizational measures,” such as:

• Encryption of sensitive data.
• Restricted access controls.
• Secure cloud or on-premise storage.
• Following EU-approved mechanisms (SCCs, adequacy) for transfers outside the EU.

6. Responding to Data Subject Rights

EU individuals can demand access, corrections, deletions, or even portability of their data. Exporters must:

• Build processes to respond within 30 days.
• Train staff to recognize and handle such requests promptly.

7. Penalties and Reputational Risks

Non-compliance carries fines up to €20 million or 4% of global turnover. But beyond financial damage, loss of trust can be costlier. EU clients increasingly prefer partners who are GDPR-compliant, treating it as a mark of professionalism and credibility.

Lessons from GDPR enforcement cases

Enforcement has been strict and wide-ranging. The EU monitors GDPR compliance primarily through Data Protection Authorities (DPAs) in each member state. These regulators investigate complaints from individuals, conduct audits, and monitor organizations’ data practices.

They can issue warnings, corrective orders, or fines. Companies are also required to report breaches within 72 hours, allowing authorities to assess violations quickly and act.

Here are some of the most popular and recent enforcement cases:

1. Meta – €1.2 billion fine (May 2023)
   The Irish Data Protection Commission imposed the largest GDPR fine to date on Meta for transferring EU users’ personal data to the U.S. without adequate safeguards.
2. Amazon – €746 million fine (July 2021)
   Luxembourg’s regulator fined Amazon for breaches in its targeted advertising practices, particularly around insufficient consent.
3. TikTok – €530 million fine (May 2025)
   TikTok was fined for transferring EU user data to China without transparency and for failing to properly inform users about such transfers.
4. Meta – €251 million fine for 2018 Facebook breach
   The Irish regulator penalized Meta for the “View As” feature breach that exposed millions of user accounts via stolen tokens.
5. British Airways – £20 million fine (October 2020)
   British Airways suffered a large-scale data breach affecting about 400,000 customers after hackers diverted users to a fraudulent site. The regulator penalized the airline for weak security controls.

Even smaller firms have been fined for cookie consent failures, weak security, and excessive data retention. The lesson is clear: no company is too small to be caught under GDPR.

What Indian exporters should keep in mind

For Indian exporters, GDPR compliance may appear complex, but certain best practices can significantly reduce risks:

• Review Data Flows: Indian exporters should begin by mapping the entire lifecycle of EU customer data—where it is collected, how it is processed, where it is stored, and who has access.
• Update Privacy Policies: Every exporter with EU-facing business must publish transparent privacy policies on websites and contracts. These policies should clearly explain what personal data is collected, why it is collected, how long it will be stored, and whether it will be shared with third parties.
• Obtain Valid Consent: Consent under GDPR must be explicit, informed, and freely given. Exporters must avoid vague disclaimers or pre-ticked boxes, instead using opt-in mechanisms. Businesses should also maintain records of consent to prove compliance in case of audits or partner due diligence checks.
• Secure Your IT Systems: GDPR requires “appropriate technical and organizational measures” to protect personal data. Indian exporters should implement robust cybersecurity practices, including encryption, firewalls, intrusion detection, and strict access controls. Regular system audits and employee awareness training also help strengthen resilience against cyberattacks or accidental data leaks.
• Sign DPAs with Partners: When working with EU distributors, logistics providers, or cloud services, exporters should establish Data Processing Agreements (DPAs). These contracts define roles and responsibilities for data handling, ensuring both sides comply with GDPR.
• Train Employees: Employees handling customer data—whether sales, IT, or logistics staff—must be trained on GDPR basics. Training should cover lawful data use, secure storage, customer rights, and procedures for reporting breaches.
• Prepare for Data Requests: GDPR grants EU individuals strong rights, including access, rectification, deletion, and portability of their data. Exporters must establish clear internal procedures to respond to such requests within 30 days.
• Use Approved Transfer Mechanisms: Exporters storing or processing EU data in India must use safeguards such as Standard Contractual Clauses (SCCs) or rely on adequacy arrangements. Without these legal instruments, transfers can be considered unlawful. Exporters should also keep updated on EU decisions regarding international data transfers.
• Monitor Third-Party Vendors: Often, personal data passes through vendors like cloud providers, CRMs, or shipping software. Exporters remain responsible for these vendors’ compliance. Regularly auditing vendor contracts, requesting GDPR assurances, and choosing certified providers ensures that third parties do not compromise overall compliance obligations.
• Keep Documentation: Under GDPR’s accountability principle, exporters must not only follow the law but also prove compliance. This requires maintaining detailed records of processing activities, consents, contracts, data security policies, and breach responses. Well-kept documentation reassures EU partners and provides evidence in case of regulatory scrutiny.

Speaking at a webinar on India’s Digital Personal Data Protection Act (DPDPA), 2023 and the General Data Protection Regulation (GDPR) of the European Union, organized by TPCI in collaboration with Saga Legal, Varun Patil, Country Head – India, Cesim India Private Limited, said: –

“One of the biggest challenges we face is the transfer of data from the EU to our India development team for bug fixes and technology improvements. Unlike data flows within the EU, this requires a clear legal basis—whether it’s defining the data type, applying standard contractual clauses, or assessing associated risks. Expansion across EU countries further adds complexity, since each market, like Germany, layers its own stricter rules on top of GDPR. Coupled with the fact that India doesn’t yet have GDPR adequacy status, every new vendor onboarding—say with a cloud provider like AWS—means navigating fresh compliance hurdles. It’s a scaling issue that impacts both our growth and day-to-day product development.”

Priyam Dhamankar, Legal and Compliance Director, Company Secretary, Public Affairs Lead at Servier India Private Limited shared an instance of an audit, where they had no idea that the designated email ID wasn’t even working.

“The auditor kept sending mails, but nobody on our side ever received them—and we couldn’t even identify whose email it was meant to be. That raised a worrying thought: what if sensitive queries or PV concerns were being routed elsewhere? For me, the real challenge goes beyond just drafting agreements and assigning data privacy obligations. It’s about testing these processes in practice and ensuring they actually work in real-life scenarios.”

Challenges for Indian SMEs

For small and medium exporters, GDPR compliance can seem overwhelming due to:

1. Complex Legal Framework: GDPR is a dense and highly technical regulation, making it difficult for SMEs to interpret without expert help. Understanding provisions on consent, data transfer, and individual rights requires legal knowledge, often forcing smaller firms to hire costly consultants or rely on external compliance support.
2. High Compliance Costs: SMEs often lack the financial resources to implement strong data protection frameworks. Setting up secure servers, encryption systems, and compliance software can be expensive. For smaller exporters, these costs eat into profits and may discourage them from pursuing EU market opportunities.
3. Technology Gaps: Many SMEs still rely on legacy IT systems that are vulnerable to data leaks. Upgrading infrastructure to meet GDPR standards—including secure storage, firewalls, and breach detection—demands investments in new technology.
4. Limited Awareness: A large number of Indian SMEs are unaware of the scope of GDPR and mistakenly assume it does not apply to them. This lack of awareness leads to missed compliance measures, exposing businesses to fines, reputational harm, and loss of valuable EU clients.
5. Data Transfer Restrictions: Since the EU does not currently grant India “adequacy” status, SMEs must rely on complex contractual mechanisms like Standard Contractual Clauses. Drafting and enforcing these contracts adds legal and administrative burdens, often beyond the capabilities of smaller firms with limited resources or legal teams.
6. Vendor Dependence: SMEs often outsource IT, logistics, or cloud storage to third parties, but GDPR makes them accountable for vendor compliance too. Monitoring partners’ practices, negotiating data protection agreements, and ensuring security across the supply chain is a demanding task for businesses with minimal bargaining power.
7. Penalties and Risks: Even though GDPR penalties are proportionate, they can still devastate smaller exporters. Fines of up to €20 million or 4% of global turnover are enough to cripple SMEs, making them cautious about EU engagements despite the potential for long-term growth.

However, many EU buyers and distributors now prefer GDPR-compliant partners, meaning compliance is also a competitive advantage. SMEs that adopt strong data protection practices can differentiate themselves in the global market.

The General Data Protection Regulation is not just a European law—it is a global standard that Indian exporters must adapt to if they want to succeed in EU markets. By safeguarding personal data as diligently as they safeguard product quality, exporters can ensure both compliance and credibility.

Road ahead

As global trade grows increasingly data-driven, GDPR is shaping the benchmark for privacy worldwide. With the upcoming India-EU Free Trade Agreement (FTA), Indian exporters who align with GDPR standards today are better positioned for emerging regulations in AI, digital services, and cross-border data transfers. While India’s Digital Personal Data Protection Act, 2023 strengthens domestic governance, the lack of EU “adequacy” status still challenges seamless transfers. Treating data protection as a strategic investment—not just a legal obligation—can enhance credibility, secure EU partnerships, and future-proof businesses. GDPR is more than compliance; it is a gateway to trust and long-term global growth.

The bottom line: GDPR is here to stay. For Indian exporters, embracing its principles is not just about avoiding penalties—it is about future-proofing their businesses, winning trust, and positioning themselves as reliable partners in the world’s most privacy-conscious market.

In the next article we will cover India’s Digital Personal Data Protection Act, 2023 (DPDPA) and how it aligns with or diverges from GDPR.

---

FAQs

1. When should an Indian business consider GDPR compliance?

Indian businesses must comply if they process EU residents’ personal data, offer goods/services to them, or monitor their online behavior, even from India.

2. What are the key obligations under GDPR?

Businesses must obtain consent, secure data, conduct DPIAs for high-risk processing, notify breaches within 72 hours, and appoint a Data Protection Officer if needed.

3. What are the penalties for non-compliance?

Non-compliance can result in fines up to €20 million or 4% of global annual turnover, whichever is higher.

4. How does GDPR compare to India’s DPDPA?

GDPR covers all personal data; DPDPA covers digital data. Both require consent, but DPDPA allows certain processing without consent under legal obligations.

5. What steps should Indian businesses take for compliance?

Assess applicability, implement data protection policies, train employees, manage consent, and regularly audit data processing to ensure GDPR compliance.