Legal Risks of Biometric Data Collection: Compliance Under IT & Privacy Laws in India

Introduction

In today’s digital-first ecosystem, biometric data is becoming a cornerstone of identity verification across both public and private sectors in India. From Aadhaar-based authentication systems to facial recognition software used in mobile devices, office attendance systems, airports, and banking, the collection and processing of biometric data have seen an exponential rise. This data includes highly personal identifiers such as fingerprints, iris scans, facial features, voice patterns, and even behavioral traits.

What makes biometric data particularly significant is its permanence—unlike passwords or PINs, you can't change your fingerprints or retina scans. This very nature also makes it exceptionally sensitive. If compromised, biometric data can lead to irreversible breaches of personal privacy, identity theft, and reputational damage for both individuals and organizations.

As businesses continue to adopt biometric solutions for operational efficiency and enhanced security, it becomes critical to understand the legal obligations tied to such data. India's regulatory landscape, including the Information Technology Act and the proposed Digital Personal Data Protection Bill, lays out clear frameworks around data protection, consent, and lawful processing. Non-compliance not only invites legal penalties but also erodes customer trust, making regulatory alignment a business necessity, not a choice.

2. What is Biometric Data?

Biometric data refers to unique biological characteristics that can be used to identify an individual. Under the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, biometric data is explicitly categorized as Sensitive Personal Data or Information (SPDI). This includes measurable human features such as fingerprints, facial images, voice recognition data, iris scans, and even behavioral traits like typing patterns or gait.

Unlike other forms of personal information, biometric identifiers are inherent to an individual and cannot be changed, making them highly sensitive and valuable. As such, any organization collecting, processing, or storing biometric data must adhere to strict data protection standards, including obtaining informed consent, securing the data from unauthorized access, and limiting its use to clearly defined purposes.

Businesses that fail to implement reasonable security practices risk facing penalties under Section 43A of the IT Act, 2000, which holds companies liable for negligence in protecting sensitive personal data. In today’s digital ecosystem, ensuring the lawful handling of biometric data isn’t just a regulatory necessity—it’s a critical step in building trust with consumers and avoiding costly legal liabilities.

3. Regulatory Framework Governing Biometric Data in India

A. IT Act, 2000 (Sections 43A & 72A)

Under Section 43A, companies handling sensitive personal data, including biometric information, are legally liable if they fail to implement reasonable security practices, resulting in wrongful loss or gain. Section 72A further imposes penalties for disclosing personal data without consent or breaching a lawful contract. These provisions hold data handlers accountable for negligence and unauthorized disclosures, including in cases involving third-party processors.

B. IT Rules, 2011

The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, classify biometric data as Sensitive Personal Data or Information (SPDI). Organizations must obtain explicit and informed consent before collecting such data. These rules also mandate secure storage, restricted access, and limited disclosure, emphasizing user rights and corporate accountability.

C. Draft Digital Personal Data Protection (DPDP) Act, 2023

Proposed by MeitY, the DPDP Act introduces a framework based on purpose limitation, data minimization, and consent-driven processing. It defines roles like data fiduciaries (entities that process data) and data principals (individuals to whom data relates). Businesses classified as significant data fiduciaries, such as those handling extensive biometric data, are subject to enhanced compliance obligations, including mandatory impact assessments and the appointment of Data Protection Officers.

4. Key Legal Risks in Biometric Data Collection

Collecting and handling biometric data presents several legal pitfalls, especially under India’s evolving data protection framework.

• Consent Failures are among the most common risks. Organizations often use vague or blanket consent forms that fail to explicitly inform individuals about their biometric data's purpose, duration, and usage, violating the IT Rules, 2011.
• Storage Without Security is a critical concern under Section 43A of the IT Act, 2000. Businesses that fail to implement “reasonable security practices” may be held liable for data breaches or unauthorized access to biometric records.
• Unlawful Sharing of biometric information with third-party service providers, especially without specific and informed user consent, can trigger both civil and criminal liabilities.
• Retention Risks arise when organizations store biometric data longer than legally necessary. Without defined retention policies, businesses may inadvertently breach privacy rights.
• Cross-border Transfer of biometric data raises compliance issues, particularly as the Digital Personal Data Protection (DPDP) Act introduces stricter controls on data export. The absence of clarity on approved jurisdictions can put businesses at risk of regulatory scrutiny.

Failing to address these risks can lead to penalties, loss of trust, and legal action, making proactive compliance a business imperative.

Risk	Source of Violation	Potential Impact	Legal Reference
Consent Failures	Vague language in consent forms	Lawsuits, regulatory penalties	IT Rules, 2011
Storage Without Security	Poor encryption, lack of audit logs	Breaches, compensation under Section 43A	IT Act, 2000
Unlawful Sharing	No third-party consent clause	Legal action, reputational harm	DPDP Act, 2023
Retention Risks	Undefined data lifecycle policies	Non-compliance, user trust erosion	Draft DPDP Bill
Cross-border Transfer	Sending data to unauthorized regions	Regulatory restriction, penalties	DPDP & RBI Circulars

5. Data Protection Compliance Checklist for Businesses

To ensure legal compliance while handling biometric data, businesses must adopt a structured approach to data protection:

• Draft a Biometric Data Privacy Policy: Clearly outline the purpose of data collection, retention period, user rights, and third-party disclosures. This ensures transparency and builds user trust.
• Conduct Data Protection Impact Assessments (DPIAs): Evaluate the potential risks of collecting and processing biometric data. DPIAs help mitigate privacy risks and demonstrate due diligence under evolving laws like the Digital Personal Data Protection Act, 2023.
• Secure User Consent Using Clear and Accessible Language: Consent must be informed, specific, and freely given. Avoid technical jargon and provide users with the ability to opt out.
• Encrypt Biometric Data and Use Secure Storage Environments: Implement end-to-end encryption, access controls, and monitoring systems to prevent unauthorized access or breaches.
• Appoint a Data Protection Officer (DPO): If classified as a Significant Data Fiduciary, appointing a DPO is mandatory to oversee compliance and manage user grievances.
• Conduct Regular Compliance Audits and Employee Training: Periodic audits and awareness programs ensure that policies are enforced and employees remain updated on data handling protocols.

Seedling Associates assists businesses in implementing these measures to maintain robust data governance.

6. Government & Sectoral Guidelines to Consider

Biometric data collection in India is not governed by a single unified law but is shaped by sector-specific guidelines issued by various regulatory bodies.

• UIDAI Guidelines: The Unique Identification Authority of India (UIDAI) strictly regulates the use of Aadhaar-related biometric data. As per the Aadhaar Act, biometric authentication data—such as fingerprints or iris scans—cannot be stored, shared, or published. Entities must comply with data minimization, obtain user consent, and adhere to encryption standards. Unauthorized use or storage may attract penalties under Sections 29 and 37 of the Aadhaar Act.
• FSSAI & Health Sector: In sectors like food and pharmaceuticals, biometric systems are increasingly used for employee attendance and access control in sensitive areas. While not governed by a specific biometric law, the FSSAI and CDSCO stress hygiene, accountability, and secure access, often enforced via biometric checkpoints. Businesses must ensure biometric use complies with the general IT Rules and industry best practices for data protection.
• RBI Guidelines: The Reserve Bank of India promotes biometric KYC through Aadhaar e-KYC, especially in financial inclusion schemes. Banks and NBFCs must implement strict data protection protocols, ensure secure authentication, and avoid unauthorized data retention to remain compliant with the RBI’s cybersecurity framework.

7. International Perspective

When comparing India’s legal landscape on biometric data with global standards like the General Data Protection Regulation (GDPR) in the EU and the California Consumer Privacy Act (CCPA) in the US, we observe a growing alignment—especially with the introduction of India’s Digital Personal Data Protection (DPDP) Act, 2023.

The GDPR mandates explicit consent for processing biometric data, classifying it as “special category data.” It also requires Data Protection Impact Assessments (DPIAs) when such data could result in a high risk to individuals' rights. The CCPA, though slightly broader, grants California residents the right to know, delete, and opt out of the sale of their personal data, including biometric identifiers.

India’s DPDP Bill, though still evolving, incorporates key global principles such as consent-driven data processing, purpose limitation, data minimization, and user rights. The creation of roles like Data Fiduciaries mirrors GDPR’s Data Controllers, while Data Principals resemble data subjects. Moreover, the DPDP Act introduces provisions for cross-border data transfer restrictions, further aligning with international frameworks.

For Indian businesses, this convergence signals the importance of building globally compliant data practices, especially when handling sensitive biometric data across borders.

8. How Seedling Associates Can Help

At Seedling Associates, we specialize in offering end-to-end legal and compliance support for businesses navigating the complex landscape of biometric data collection and processing.

Our team assists in drafting Biometric Data Use Policies and Consent Forms that are fully compliant with India’s IT Rules and the upcoming Digital Personal Data Protection Act. These documents are tailored to your specific operations, ensuring that consent mechanisms are clear, informed, and legally valid.

We support organizations in conducting Data Protection Impact Assessments (DPIAs) and filing necessary declarations with regulatory bodies. Our legal experts identify potential data risks and suggest safeguards to protect biometric information from unauthorized access or misuse.

In case of inquiries or audits, we act as your trusted advisor by liaising with government authorities, such as the Ministry of Electronics and Information Technology (MeitY) or UIDAI, to ensure compliance and timely resolution.

If a data breach or privacy violation occurs, we provide representation and legal support, from drafting responses to regulatory notices to defending your interests in court. With Seedling Associates, you’re not just legally protected—you’re future-proofed.

9. Conclusion

In today’s rapidly digitizing ecosystem, biometric data stands as one of the most sensitive categories of personal information. From facial recognition systems to fingerprint authentication, the use of such data offers convenience, but it also brings significant legal and ethical responsibility. Mishandling or unauthorized use of biometric identifiers can result in serious legal consequences under India’s IT Act, IT Rules, and the evolving Digital Personal Data Protection (DPDP) framework.

Ethical data governance isn’t just a regulatory necessity—it’s a trust-building tool. Consumers and stakeholders are increasingly conscious of how their data is collected, stored, and used. Businesses that take a proactive approach to data protection not only safeguard themselves from legal liabilities but also enhance their brand credibility and operational resilience.

Whether you're a startup deploying biometric attendance systems or a tech firm integrating facial recognition APIs, it's vital to ensure end-to-end compliance with applicable laws and sector-specific guidelines. This includes obtaining informed consent, securing storage systems, and regularly auditing data usage policies.

Get in touch with Seedling Associates today to ensure your biometric data-handling processes are fully compliant, ethically aligned, and future-ready. Our team of legal experts is here to help you navigate India’s complex data protection landscape with confidence.