What section 16 says
Section 16(1) allows the Central Government, by notification, to restrict the transfer of personal data by a Data Fiduciary for processing to such country or territory outside India as it notifies. This is often called a negative list approach: transfers are allowed in general, and restrictions attach to the places the government names.
Check the MeitY site for any notification under section 16 before you treat a destination as open.
Stricter laws still apply
Section 16(2) says the section does not restrict any other law in India that provides a higher degree of protection for, or restriction on, transfers of personal data outside India. Sector rules therefore continue alongside the Act.
A familiar example is the Reserve Bank of India's direction on storage of payment system data, which requires payment system operators to store the entire data relating to payment systems only in India. A payments company can comply with the DPDP Act and still breach that direction if it moves the data abroad. Insurance, telecom and government contracts may carry their own conditions too.
What the Rules add
The DPDP Rules say that transfers outside India may be subject to requirements the Central Government specifies by general or special order, in particular on making personal data available to a foreign State or to any person or entity under its control.
Separately, a Significant Data Fiduciary may have to ensure that certain personal data, identified on the recommendation of a committee the government sets up, is processed subject to the restriction that it and the related traffic data are not transferred outside India.
Where transfers hide
Transfers are rarely one big export. A hospital chain may use a cloud email service hosted abroad, a support desk tool with servers in another region, and an analytics script that sends patient app events to a foreign vendor. Each is a transfer that should be on your list.
- Cloud hosting and backup regions
- SaaS tools for email, CRM, support and HR
- Analytics, advertising and crash reporting SDKs in apps
- Group companies and shared service centres abroad
- Sub-processors used by your vendors
How TrustOS helps
The data inventory and processor records note where each system and vendor processes data, including sub-processors, so you can list every destination country in minutes. If a restriction is notified, you can see which purposes, data sets and contracts it touches and assign the work.
TrustOS does not decide whether a transfer is lawful under the Act, a sector direction or a contract. That call stays with your legal counsel, and TrustOS does not replace legal advice.
Official sources
- MeitY: Data protection framework (the Act, the Rules and notifications)
- India Code: Digital Personal Data Protection Act, 2023
This guide explains the law in plain words as of October 2026. It is not legal advice. Dates that depend on notifications can change, so check the official text before you rely on them.