Cross-Border Data Regulations: What Exporters Must Know about GDPR, DPDPA, Standard Contractual Clauses and the New Rules of Digital Trade
When Indian exporters first began shipping software and IT services abroad, the biggest questions revolved around delivery timelines, coding quality, and costs. But today, another factor increasingly determines whether a company makes it past the client’s procurement desk: how well it handles personal data that crosses borders.
In a world where digital trade flows faster than container ships, personal data itself has become a tradable commodity. A European retail company outsourcing customer analytics to Bengaluru, or an American healthcare provider using an Indian back-office, isn’t just sharing code or spreadsheets. They are transferring personal data across jurisdictions, each governed by its own set of strict rules.
This is where regulations like the European Union’s General Data Protection Regulation (GDPR) and India’s Digital Personal Data Protection Act, 2023 (DPDPA) come into play. Both set the terms for how data can be collected, processed, exchanged, and even where it can be stored. And for Indian exporters, getting these rules wrong is no longer an option.
The Two Giants: GDPR and DPDPA
The GDPR, enforced since 2018, is widely regarded as the gold standard for privacy. Its reach is global: if an Indian company handles the personal data of an EU resident, GDPR applies, regardless of geography. The penalties are enough to make any CFO shudder—up to 20 million euros or 4% of worldwide turnover.
India’s DPDPA, passed in 2023, is younger but equally significant. Unlike GDPR, which offers multiple legal bases for data processing, India’s law is more consent-driven, with a few exceptions for state functions, employment, or medical emergencies. It also empowers the government to notify “trusted jurisdictions” for cross-border transfers—potentially limiting where Indian companies can send or receive personal data.
Both regimes have extraterritorial impact, meaning Indian exporters are under dual obligations: meeting client-country laws like GDPR, while also staying within the guardrails of DPDPA at home.
The Standard Contractual Clauses: The Legal Backbone of Data Transfers
At the heart of GDPR’s cross-border framework lies a tool that Indian exporters must be intimately familiar with: the Standard Contractual Clauses (SCCs).
SCCs are pre-approved legal contracts issued by the European Commission. They act as a safety net, allowing personal data to move from the EU to countries like India, which do not yet enjoy an “adequacy decision” (formal EU recognition that their laws meet GDPR standards).
In practice, this means that every Indian IT company, SaaS provider, or BPO handling EU data must sign SCCs to assure clients that personal data will be treated with GDPR-level protection—even outside Europe.
Here’s why they matter:
- Mandatory for Trade: Without SCCs, EU clients may be legally barred from sending data to Indian vendors.
- Trust Builder: They reassure clients that the Indian exporter is contractually bound to handle data responsibly.
- Legal Accountability: Once signed, SCCs bind Indian vendors to GDPR standards, regardless of India’s domestic law.
The European Commission updated these clauses in 2021 to make them GDPR-compliant and to cover more scenarios (controller-to-processor, processor-to-processor, etc.). Crucially, they now require exporters to conduct a Transfer Impact Assessment (TIA), evaluating whether the importing country’s legal system might compromise data protection—a direct response to the famous Schrems II case.
For Indian businesses, this means not only signing SCCs but also being ready to demonstrate:
- Encryption and security practices.
- Limitations on government access to data.
- Clear internal accountability mechanisms.
A simple example illustrates their role: a German e-commerce company outsourcing customer service to a call center in Pune. The German firm (controller) must insert SCCs into the outsourcing contract. The Indian call center (processor) then becomes legally obligated to handle EU customer data—names, orders, complaints—as if GDPR itself applied within its servers. If it fails, liability can fall on both sides.
What’s at Stake for Exporters
For Indian businesses, these aren’t abstract legal debates. They strike at the heart of competitiveness in global markets.
- Data Transfers: SCCs are often the only lawful way to move EU data into India.
- Data Exchange: Day-to-day collaboration—sharing logs, customer lists, or even test data—must now flow through legally watertight channels.
- Data Imports and Exports: Indian firms importing EU customer data for processing must treat it with GDPR safeguards and ensure equally careful re-export back to clients.
- Data Centers: While GDPR doesn’t force companies to host data in the EU, many European clients prefer it. Meanwhile, India’s DPDPA allows cross-border storage but leaves room for restrictions in sensitive areas. Exporters must therefore prepare for hybrid hosting models.
The New Procurement Checkpoint
Here’s the reality on the ground: a European bank looking to outsource work to an Indian vendor isn’t just checking coding skills anymore. It is also asking:
- Do you comply with GDPR?
- Have you adopted SCCs?
- Where exactly will my customers’ data be stored?
- How do you handle erasure requests or withdrawal of consent?
If an Indian company can’t confidently answer, the deal often dies before it starts. Compliance is now the first filter in international procurement.
How Exporters Can Stay Ahead
The good news is that Indian exporters don’t need to see GDPR or DPDPA as obstacles. In fact, handled well, compliance can become a business advantage.
- Adopt the Latest SCCs: Use the 2021 versions proactively. Don’t wait for clients to push.
- Contractual Safeguards: Define roles, responsibilities, and liabilities in every outsourcing contract.
- Smart Data Center Choices: Offer flexible models—India-only, EU-only, or hybrid—to match client expectations and evolving legal mandates.
- Data Hygiene: Collect only what you need. Encrypt and pseudonymize. Less data exposure means lower compliance risk.
- Show Evidence: Certifications like ISO 27701 or SOC 2 help demonstrate compliance beyond legal language.
Turning Regulation into Reputation
The real story here isn’t just about avoiding fines—it’s about building trust. In a crowded outsourcing market, privacy readiness is a differentiator. A company that can say, “Yes, we’re GDPR-compliant, and yes, we’ve aligned with India’s DPDPA,” doesn’t just look responsible. It looks like a future-ready partner.
In fact, many Indian exporters are now using SCC-backed compliance frameworks as part of their sales pitch. Far from being a legal checkbox, data protection is becoming a badge of credibility—one that helps close deals faster and win more demanding clients.
The Bottom Line
As per Adv Ajay Sharma, Technology Lawyer, cross-border data regulations are rewriting the rules of digital trade. For Indian exporters, GDPR and DPDPA are not merely compliance headaches—they are the entry ticket to global markets.
The companies that adapt—by adopting “SCCs, mapping data flows, investing in secure data centers, and aligning with both EU and Indian rules” will not just avoid penalties, they will win trust, secure market access, and transform privacy compliance into a powerful competitive edge.
If you need more clarifications or need advise on GDPR, DPDP Act and managing Standard Contractual Clauses, you can write at info@corpotechlegal.com or talk to experts from CorpoTech Legal team.