Welcome to The Esya Dispatch, a weekly snapshot of the policy debates shaping India’s digital economy. Each edition brings together key developments in technology policy, from platform governance and AI regulation to data protection and competition — along with the Esya Centre’s perspective on what they mean for innovation, businesses, and users.
Here’s a quick recap of two key tech policy developments from the past week:
NHRC issues notices over alleged DPDP Act violations by AI, social media, edtech platforms
The National Human Rights Commission has initiated action against certain companies alleged to have violated provisions under the Digital Personal Data Protection Act, based on a report by the think tank ASIA. The ASIA report claims that services like Meta Platforms, Khan Academy, Gemini and Perplexity AI are not compliant with the Act’s requirements related to data tracking, server security and grievance redressal mechanisms. The Commission stated that this raises serious concerns for children’s online safety and directed the entities to submit a compliance report within 15 days.
ESYA’S TAKE: The Asia report, on which the NHRC’s complaint is based, does not consider legal or technical reality. For one, it checks compliance with the Digital Personal Data Protection Act even though this law is not fully in force. Additionally, there seems to be no justification for choosing the platforms evaluated aside from reach. This metric does not make sense for platforms like ChatGPT or Claude, because users cannot reach out to one another on them. The platforms identified also have no unifying features when it comes to child safety, which renders any comparison flawed. Many of the platforms evaluated are also educational platforms, which are exempt from certain requirements under the Digital Personal Data Protection Rules, 2025.
More broadly, the NHRC’s decision to act as the de facto enforcer of a law that is not in place is concerning and sends a bad message to investors about how uncertain and unpredictable the Indian regulatory environment is, particularly for tech.
MeitY moves to regulate online user-posted news
The Ministry of Electronics and IT has proposed amendments to the IT Rules, 2021 to give greater legal weight to government-issued advisories and SOPs, and expand government oversight over user-generated online news content. Broadly, the proposed amendments mandate that platforms comply with government advisories as part of their due diligence obligations, and any failure to do so could result in them losing safe harbour under the Information Technology Act. They also enable the inter-departmental committee under the IT Rules, which comprises bodies like the Ministry of Home Affairs and the Ministry of Defence, to block user-generated news and current affairs content, and further empower this committee to examine not just escalated user complaints, but also matters referred directly to it by the government.
ESYA’S TAKE: The proposed amendments raise considerable economic concerns. For one, they envision an “advisory governance” model, where the government regulates digital services by rapidly issuing advisories in response to a specific concern or incident. While this helps with agility in governance, it also introduces significant regulatory uncertainty for businesses. This is because unlike laws and rules, advisories typically lack procedural safeguards such as prior consultation with stakeholders, a defined scope, and predictable timelines. Thus, businesses may find it difficult to anticipate regulatory changes, assess compliance obligations, and plan their investments.
The impact of this regulatory uncertainty will likely extend well beyond India’s digital markets, which are deeply interlinked with its physical economy. For example, traditional businesses that rely on digital platforms for market signaling or customer acquisition may face higher transaction costs due to the proposed amendments, which could lead them to reduce investment or outputs. Smaller firms may be forced to exit the market altogether, as they may not be able to accurately estimate regulatory risk. Thus, the ad-hoc and uncertain framework under the proposed amendments presents a systemic economic risk, which needs to be factored in by policymakers.