Building your app with Indian developers has great cost advantages and access to world class talent, but it also brings significant security, compliance, and IP challenges that need to be carefully navigated. With India’s fresh Digital Personal Data Protection (DPDP) Act levying fines to the tune of ₹250 crore ($30 million) for security breaches, EU GDPR penalties amounting to 4% of its global turnover, and California’s CCPA laying down stringent consumer privacy norms, being across the entire compliance matrix is a must for companies outsourcing development in India.
This all-encompassing guide covers every security and compliance aspect you have to think about when your app is developed in India—from GDPR and CCPA obligations to intellectual property ownership, vendor access controls, data breach mitigation, and certification requirements. Startup founder, enterprise CTO, or product manager: No matter your title, this post is your go-to guide for safeguarding your business, users, and reputation while you take advantage of India’s famously razor-sharp development chops.
India passed its first-ever comprehensive data protection legislation in August 2023, with the draft rules published in April 2025 and phased implementation anticipated from mid-2025. The DPDP Act is applicable to an “entity that processes digital personal data” in India or provides goods or services or undertakes business to Indian residents, thereby imposing extra-territorial application, quite similar to that of the GDPR.
Notable features of the DPDP Act include:
Consent requests of Data principals (individuals to whom the data relates) in case of each data processing activity shall be in a specific, clear, concise, and in plain language. The draft norms specify that the notices shall be in “clear and plain language” and be easily understood by a layperson, and be provided in a tabulated format.
Stronger children’s data protection doesn’t allow the processing of children’s personal data for behavioural monitoring, profiling, targeted advertising, or such purposes that can cause harm, with non-compliance penalties of up to ₹200 crore. This is considered one of the most stringent child privacy regimes in the world.
Compulsory breach notification - Data fiduciaries shall notify the Data Protection Board and data principals of personal data breaches within 72 hours of becoming aware of such a breach. Not reporting is punishable with a fine (contingent on the revenue of the organization) up to ₹200 crore, just to further drive home the message that having an incident response plan is essential.
Preventive measures, including encryption, access controls, logging, monitoring, and business continuity planning, must protect against breaches of the security of personal data. The maximum fine under the Act – Rs. 250 crore – is for not adopting adequate security practices, highlighting that security is the top concern.
Rights of Data Principals are individuals empowered to access your data, correct it, get it erased, appoint authorized representatives, and raise complaints with the Data Protection Board. Organizations should have defined procedures to grant these rights in a timely fashion.
The chart reflects the highest fines permitted under India’s Digital Personal Data Protection Act, which imposes the largest penalty of ₹250 crore ($30 million) for violation of the security safeguards.
GDPR still reigns as the most stringent global data privacy law and has been an inspiration for laws across the world, such as the Indian DPDP Act. Any organization that handles personal data of EU citizens needs to be GDPR-compliant, even if that organization is based in India, so Indian developers who view, collect, or process personal data of EU citizens are subject to GDPR.
Key GDPR requirements for app development are:
Lawful basis for processing: You need to ascertain the valid grounds (consent, contract, legal obligation, vital interests, public task, or legitimate interests) for processing any personal data before collecting it. More than simply consent-based models, GDPR has a range of flexible bases of processing, the review of which needs careful legal analysis.
Purpose and data minimisation principles limit the collection to data that is necessary for a defined purpose, which is an explicit purpose. Collecting “nice to have data” or processing it for uncertain future purposes is inconsistent with these principles. Developers of apps are expected to be able to justify vigorously every piece of data they collect.
Privacy by design and by default means that privacy protections need to be built into technical architecture for systems from the beginning, not added later as an afterthought. Default settings should maximize privacy, and users should have to opt in to further data processing or sharing.
Data Protection Impact Assessments (DPIAs) are now mandatory for high-risk processing activities, which include, for example, large-scale profiling, use of automated decision-making, and processing of special category data. DPIAs proactively identify and address privacy issues prior to deployment.
Right to erasure (also known as the right to be forgotten) allows individuals to request the deletion of their personal data in certain situations. Apps need to have technical means to purify every trace of user data from all systems, including backups, if they are obligated by law to do so.
Cross-border transfer restrictions disallow transfers of data of EU residents to a country without adequate protection barriers, unless through specific mechanisms such as the Standard Contractual Clauses, Binding Corporate Rules or certification schemes. Indian developers are required to follow these protections when the data is sent out from EU servers.
Maximum fines are up to €20 million or 4 percent of annual global turnover – whichever is greater – for material breaches, a financial risk that could be existential for non-compliance.
The California privacy laws apply to a business that collects personal information of a California resident and satisfies certain requirements related to revenue, volume of data, or the sale of data. Compared to GDPR, CCPA is easier in some areas, but there are new demands that Indian developers working on apps for the US markets will have to contend with.
Provisions of the CCPA/CPRA of note include:
Opt-out rights when it comes to the sale and sharing of data is the opposite of the GDPR’s opt-in consent regime, where businesses are not allowed to collect and process data until consumers have given consent. However, CPRA introduced opt-in rules for sensitive personal information and data of minors.
The Do Not Sell My Personal Information obligations require the inclusion of prominent links allowing consumers to opt-out of the sale of their data—a term more expansive than conventional commerce, involving numerous forms of data-sharing arrangements.
Deceptive Design (such as Dark Patterns) DPA applies a clear prohibition and explicitly bans any misleading design that tricks or coerces users into giving their consent to collect personal data that those users would not otherwise have given, or into waiving any GDPR-based rights to privacy. 5 2025, thus indicating a global convergence on this front.
Fines for financial reporting violations are $2,500 for each unintentional violation and $7,500 for each intentional violation, without a maximum aggregate amount for the financial penalties—meaning that they could exceed GDPR fines in case of large-scale violations. Since there is no limit on the amount, it is exposing unpredictable liability risk.
Private right of action for data breaches – lets California residents sue companies directly for statutory damages ranging from $100 to $750 per consumer per incident – something that is unheard of in the GDPR or most privacy laws. There are also class action lawsuit risks that multiply damages exponentially, so.
This radar chart compares India’s DPDP Act with GDPR and CCPA on five major aspects, with India having the strongest penalties and fewer rights for data subjects than GDPR.
Ownership of Intellectual Property is one of the most important and yet most misunderstood aspects of offshore development. Without your own legal paperwork, you might find yourself years in your business that you don’t really own the software you paid to have developed–a nightmare scenario that has taken down more than a few startups as they try to raise additional funding or be acquired.
Indian intellectual property laws offer protection for software through three main avenues: copyright, patents, and trade secrets.
Software enjoys the benefit of copyright protection as a ‘literary work’ under the Copyright Act 1957. This protection is available for liner notes, Lyrics, graphical user interfaces, and other Augmented realities. However, automatic ownership vests in the creator (developer) and not the client for whom the development work is done in the absence of specific contractual terms.
The ownership of the first rules in India varies between employee and contractor relationships. Section 17 of the Copyright Act provides that the employer is entitled to the copyright in a work made by an employee in the course of his employment. The copyright in the work is retained by the contractor in case of an independent contractor or agency relationship unless it is expressly assigned to the client through an agreement.
Many businesses are caught off guard by this default rule. Paying for development is not enough to get — you need express written assignments.
Patent applications involving software-related inventions frequently must show technical effects or improvements in a field other than software. Although India’s patent regime continues to be hostile towards pure software, inventions including hardware aspects or novel technical solutions may be patentable in India.
Trade secrets include proprietary algorithms, processes, confidential information, and business methods that have not been made public. In contrast to copyright and patents that either require registration (patents) or are born of registration/creation (copyright), trade secrets require active involvement in their protection by way of NDAs, physical controls on access, or other security protocols.
A full software development agreement is required in which both parties agree on their own specific intellectual property provisions and there is no misunderstanding/disagreement related to the ownership.
The IP rights clause must clearly state: “All intellectual property rights in the software, including but not limited to source code, object code, documentation, designs, databases, and related materials developed under this agreement, whether conceived during or after the term of this agreement, shall be owned exclusively and solely by Client. Developer hereby irrevocably assigns to Client all such rights, title, and interest”.
The assignment should extend to all facets of IP — copyrights, patents, trademarks, trade secrets, moral rights, and any future IP rights. Variation of jurisdiction means that ironclad protection transfers gaps.
The work made for hire provisions enhance the rightful ownership claim by providing that the development work is the “work made for hire” for the client’s benefit and not contractor work. Although the work for hire is different under US and Indian laws, this language will add some additional warranty.
Pre-existing IP carve-outs request developers to reveal any pre-existing code, frameworks, or IP they intend to reuse, with defined licensing terms for client use. This way you get no surprise claims like ‘our proprietary framework cannot be transmitted tell your app can only be used through our managed services. “
Third-party component documentation requires that developers keep track of all open source, third-party library, API, and licensed components used in development , with the associated license types and any compliance obligations. Unlicensed or not properly licensed components result in legal risk and potential injunctions stopping app distribution.
Moral rights waiver. A waiver in respect of moral rights is needed because moral rights are recognised under Indian law (right to attribution and right to integrity), and they are non-waivable. While the moral rights remain with the authors, contracts shall include waivers to the fullest extent of the law to avoid any future litigation.
An escrow for source code serves as insurance in the event that the vendor disappears, goes out of business, or breaches its support obligations. Software escrow services in India, such as CastlerCode, Codekeeper, and IDBI Trusteeship, etc, manage the source code with a neutral third party and release it to customers upon the occurrence of predefined events.
This chart highlights the top IP ownership risk in the in case of outsourcing to India, with ‘No Written Agreement’ and ‘Open Source Violations’ identified as the biggest threat.
Strong contracts notwithstanding, there is less risk of IP theft in offshore development with proactive measures.
Non-Disclosure Agreements (NDAs) Need to Be Signed Before Disclosing Any Confidential Details About Your App Idea, Business Workflow, Technical Architecture, or Proprietary Data. Indian laws also uphold well-drafted NDAs, and they are made applicable as your first line of defense.
NDAs may wish to broadly define what constitutes confidential information, specify an obligation not to disclose/use such information except for the project, include information security measures for holding such information, and include post-termination confidentiality obligations running for 2-5 years.
Code audits and reviews from independent third parties ensure developers are writing original code rather than pasting from prior work or public repositories without attribution. Routine inspections during development, not only at completion, identify problems early before they are woven into the code base.
Access controls restrict developers’ access to the specific resources they require to do their particular jobs. Role-based access control (RBAC), multi-factor authentication, and activity logging provide audit trails that demonstrate who accessed what information and when.
Access-restricted version control via GitHub, GitLab, or Bitbucket offers visibility into code changes while ensuring security with fine-grained permissions, branch protections, and audit logs. Compel developers to use your controlled repos instead of their own accounts.
Departure protocols for developers or dead projects dictate all source code, documentation, credentials, accounts, and IP must be handed over. The final payment should be dependent on the satisfactory transfer of all the assets, and their completeness should be verified.
Source code escrow offers vital protection when you are dependent on vendors for business-critical software. You deposit source code with a neutral third-party agent and gain access to it should the vendor be unable to meet its obligations, go out of business, discontinue support, or under other release conditions.
How software escrow works:
The developer deposits source code, build instructions, dependencies, documentation, and credentials with an escrow agent such as CastlerCode, Codekeeper, NCC Group, or IDBI Trusteeship. Deposits take place at scheduled intervals (for example, with each release or monthly).
Upon the occurrence of release conditions – bankruptcy, acquisition, breach of contract, discontinued support, failure to maintain SLAs – the escrow agent confirms such a situation and discloses the escrowed items to you.
At that point, you are free to maintain, update, modify, and continue to use the software yourself or hire new developers to further develop it.
Advanced cloud-native escrow provider CastlerCode provides seamless automated deposits using GitHub/GitLab integrations, cloud storage with AES256 encryption, ICC security-compliant instant global access upon release condition triggers, and compatibility with RBI, IRDAI, and SEBI escrow norms.
Escrow authentication services verify the materials that are deposited to ensure they are complete; the applications can be built and used to recreate the working application, more assurance than just a deposit arrangement. Verification prevents unfinished deposits before you really need to rely on them, and in the worst of times.
In the case of SaaS applications, look at SaaS escrow arrangements that cover not only source code but also deployment artifacts, configurations, credentials, and database schemas for reproducing the cloud service.
Security violations have disastrous outcomes—₹250 crore penalties under DPDP, fines under GDPR of up to 4% of turnover, class action lawsuits under CCPA, loss of customers, and reputational damage that is irreversible. It’s a fraction of the cost of breach remediation to build in strong security from the ground up when creating your app.
Data breaches in India are increasing in magnitude and complexity, with leading firms such as BigBasket (20 million users), Air India (4.5 million customers), and boAt (7.5 million customers) being affected by major breaches exposing millions of records. When you factor in all the aspects, the average cost of a data breach in India balloons up to around $739,000.
This pie chart shows the average cost of a data breach in India, with the biggest share coming from regulatory fines (29%) followed by reputation damage (22%)
Costs for a breach include:
Regulatory fines (29% of total cost) are the biggest single cost, with penalties under the DPDP Act of up to ₹250 crore, GDPR fines up to 4% of global annual turnover, and CCPA violations at $2,500-$7,500 per violation per affected user.
Reputational harm (22%) leads to attrition of customers, lost sales, lower brand value, and a diminished share price that lasts for years after the breach. Research reveals that 57% users stop using apps after security breach incidents.
Lost revenue (18%) includes immediate customer churn, increased acquisition costs for replacement customers, and revenue losses due to less trust.
Costs (12%) include legal costs to defend, settle, class action suits (particularly under CCPA’s private right of action), regulatory proceedings and contractual dispute resolution.
Detection and escalation (6%) encompasses security monitoring solutions, forensic analysis, breach evaluation, and initial response management.
Response to a breach (8%) includes credit monitoring for victims, call centers, public relations campaigns, and remediation consulting.
Expenses related to customer support (4%), forensics (5%), and notifications (3%) complete the list of costs.
The draft rules of India’s DPDP Act prescribe certain minimum security practices related to which the data fiduciary is to follow:
The encryption standards required on personal data include encrypting, obfuscating, masking, or tokenizing, at rest and in motion. With today’s standards like AES-256 for stored data and TLS 1.3 for data in transit, this is now considered the minimum level of evaluation.
Access control In access control, access to computer resources and personal data is restricted by RBAC and MFA, and RBAC is combined with the principle of least privilege (PoLP), which dictates that users should be given the minimum permissions necessary to do their jobs. Zero Trust models, which authenticate every access request in real time irrespective of the network location, provide even stronger protection.
Monitoring and log Alerts, and visibility into data accessed by generating detailed audit logs, live monitoring, and periodic auditing to identify unauthorized access, perform forensics on incidents, and help ensure no recurrence of the same event. Logs need to be maintained for a minimum of one year, except when other laws call for logs to be maintained for longer periods.
Continuity of business processing is maintained when confidentiality, integrity, or availability is disrupted through means such as data backups, disaster recovery protocols, and redundant systems. Routine testing confirms recovery processes do work in a crisis.
Your contracts with data processors (vendors that process data for you) need to include equivalent security protections, so that the full data processing chain is protected.
This graph illustrates the costs of enacting necessary security controls, with penetration testing ($25k) and routine audits ($20k) as the priciest
Above and beyond the regulatory minimums, security involves multiple layers of defense on all Dev and Ops fronts:
Secure software development lifecycle (SSDLC) addresses security issues beginning with requirements gathering and continuing through deployment, e.g., threat modeling, secure coding practices, code reviews, static and dynamic analysis, and penetration testing.
Input validation and output encoding can also prevent injection attacks (SQL injection, cross-site scripting, command injection) that are among the most prevalent vulnerabilities in web and mobile apps. Never trust user input—validate, sanitize, and encode any data that comes from users or external systems.
Authentication and session management enforce robust password policies, store passwords securely using salted hashing (bcrypt, Argon2), support multi-factor authentication, use secure session tokens, and have an idle session time-out.
API security requires authentication (OAuth 2.0, JWT tokens) and rate limiting to avoid abuse, input validation, output filtering, and encrypting all communications with the API. Numerous breaches take advantage of unsecured APIs that developers assumed would never be found.
Infrastructure security is about fortifying your servers, databases, and cloud environment with regular updates, firewall rules, network segmentation, intrusion detection systems (IDSs), and security information and event management (SIEM) solutions.
Mobile-specific security, such as secure local storage (iOS Keychain, Android KeyStore), certificate pinning to protect against man-in-the-middle attacks, jailbreak/root detection, and code obfuscation to prevent reverse engineering for iOS and Android applications.
Vulnerability assessments and penetration testing by independent security firms such as Qualysec, WeSecure App, or Mandiant uncover weaknesses ahead of attackers. Annual penetration tests constitute a minimum frequency; critical applications should be subjected to continuous security testing.
Security awareness training provides information to developers, administrators, and staff on topics such as social engineering, phishing, secure coding practices, and security policies. Human error also contributes to large breaches, so training is critical beyond the technical controls.
Excess access provisioning is one of the most dangerous and ignored security vulnerabilities when dealing with Indian outsourcing. Standard vendor practice is to provide far more access than necessary, introducing unnecessary risk.
The chart above exposes the disturbing discrepancy between desired vendor access and Indian vendors’ typical practice of over-provisioning in high-risk areas, such as admin and production access
All developers, admins, and vendors should have only the minimum access required to complete their responsibilities—no more. This rule applies in multiple dimensions:
Role-based access control (RBAC) allows defining permissions based on roles instead of assigning each user individually, simplifying access management and increasing its consistency. Developers have repository access and staging environments; QA has testing environments and bug tracking; project managers have access to project management tools and reports; administrators have access to the infrastructure with full logging.
Temporal access controls grant permissions for defined periods of time, ensuring that access is revoked when projects complete or contracts expire. Elevated privileges required for a one-time task (e.g., database migration) should automatically be rolled back after that task has been completed.
Segregation of duties ensures that no one person has control over an entire process from start to finish, which mitigates the risk of fraud and errors. DBAs don’t deploy code; developers don’t change prod dbs; finance people don’t approve their own expense reports.
Studies reveal distressing disparities between best-in-class access controls and what Indian vendors generally offer:
About 5% of the vendor staff (dedicated administrators) need to have full admin access—full admin access goes to 75% of the vendor staff, a 15-fold over-provisioning that results in massive breach risks. Each and every admin user can see, delete, or edit any data, install malware, create backdoors, or steal data.
10% of the team (senior engineers and ops) should have access to the production environment, but they say they’ve seen it as high as 70% (includes junior developers, who, let me tell you right now, should not be touching anything live customer related…‐ I’m a bit afraid of that one, guys.). Development access to actual customer data should be restricted to 15% (senior engineers engaged in specific troubleshooting with customer consent), yet it too can soar as high as 60%, putting sensitive information in the hands of too many outside people.
While source code access must be much more widely available when developing, 95% of vendors give unlimited access to source code for all technical personnel, including start date hires, contractors, or even non-technical management. Best practices would restrict access to those actively working on the project (40%).
Read/write permissions on the database require island-level attention since you are dealing with sensitive data directly. Just 25% of the staff have write permissions (backend developers, DBAs), and 60% have read-only for reporting/analytics. The truth, however, is often the reverse, with 80% having write access and 45% read-only.
Turn vendor access management from a security risk to a competitive differentiator with automated controls:
Access request and approval workflows are enforced that demand formal requests with business justifications, approvals by the necessary authorities (technical lead, security officer, client representative), and use automated provisioning that applies least-privilege defaults.
Periodic access reviews (quarterly or semi-annually) ensure that access is still appropriate when people’s roles change, projects evolve, and people leave. Automated tooling reports on irregularities such as sleeping accounts that have granted permissions and privilege escalations out of the blue.
Monitoring and logging all privileged access can be monitored and logged to provide an audit trail to meet compliance requirements and lead to rapid investigation in the event of suspicious activity. Security Information and Event Management (SIEM) solutions collect logs, identify suspicious activity, and notify security teams of potential breaches in real-time.
Multi-factor authentication (MFA) for all access, and especially for privileged accounts, stops the theft of credentials from leading to system compromise. MFA should be required, not optional, on production systems, source code repositories, and for any access to customer data.
VPN and network segmentation limit vendor access to specified systems via VPNs, which require strong authentication, and restrict the possibility of uncontained lateral movement if credentials are lost. Development, staging, and production environments should be on different segments of a network, with firewall rules disallowing access between them unless required and secured.
Just-in-time (JIT) access gives users temporary elevated privileges only when performing the specific task for which the privileges are needed, and will automatically expire after the task is completed. Advances in privileged access management (PAM) solutions allow users to request temporary admin access for 2 hours to perform server maintenance, and the privilege will be automatically revoked when the time window elapses.
Security certifications provide independent auditing of an organization’s implementation of information security controls and provide assurance to customers, and meet the requirements of compliance.
This chart exposes the stark certification divide, where 85% of enterprise companies are ISO 27001 certified compared to 8% of startups, illustrating compliance challenges for smaller organizations.
ISO 27001 is the international standard for ISMS (Information Security Management Systems), which allows organizations to manage the security of assets such as financial information, intellectual property, employee details, or information entrusted by third parties in a systematic and cost-effective manner with confidentiality, integrity, and availability.
ISO 27001 certification shows:
Systematic risk management based on holistic risk assessments, which identify threats, vulnerabilities, and potential impacts, and are followed by risk treatment plans that apply controls.
Registered policies and procedures related to the information security policy, asset management, access control, cryptography, physical security, operations security, communication security, system acquisition/development, supplier relations, incident response, business continuity, and compliance.
Ongoing improvement through internal audits, management reviews, nonconformity corrective action, and periodic ISMS reviews results in sustained effectiveness in the face of evolving threats.
The adoption trend among Indian IT firms per size is: 85% of enterprises (1000+ employees) have ISO 27001 certification, 65% of large companies (500-1000), 42% of mid-sized companies (100-500), 18% of small companies (20-100), and 8% of new ventures consuming less than twenty people.
This gap in certification means that smaller vendors also tend to have less formalized security programs and, therefore, require more diligence from their clients.
The ISO 27001 certification can take 6-12 months and involves gap analysis against the ISO 27001 requirements, documentation of policies and procedures, ISMS implementation, internal audits, corrective actions, external certification audit (Stage 1 and Stage 2), issuance of the certification, and surveillance auditing every 6-12 months with recertifications every 3 years.
Certification fees vary based on organization size and complexity, but they may range from $15,000 to $40,000. These fees are inclusive of consulting fees, implementation fees, certification body audit fees, as well as the ongoing surveillance fees.
SOC 2 reports, created by the American Institute of CPAs (AICPA), assess a service organization’s controls related to security, availability, processing integrity, confidentiality, and privacy. It’s very well received among US companies that are assessing vendors, and SOC 2 delivers much more granular assurance around operational controls.
SOC 2 penetration in India is far lower than that for ISO 27001, with 45% of large enterprises certified, 32% of mid-size, 15% of small companies, and 5% of startups. The US focus and higher cost of audit explain a less spread uptake, although the demand from American customers is increasing.
Survey results report even lower percentages of those following privacy regulations: 75% of enterprises report they are GDPR compliant (though this number is widely exaggerated), and, differentiating by company size, 55% of large companies are compliant, 35% of medium-sized businesses, 12% of small companies, and 5% of startups.
India’s DPDP Act readiness is staggeringly low at a mere 35% enterprises, 25% large companies, 15% mid-size, 8% small, and 3% startups preparing for compliance. Most organizations are waiting for the implementing rules to be finalized before they put money into compliance programs, which is leading to risk as enforcement nears.
While evaluating the Indian development partners, verify their certifications in detail:
Confirm the validity of certificates on the websites of the issuing bodies. The [ISO 27001] certificates can be verified with the certification bodies like Bureau Veritas, BSI, DNV, TUV, Intertek, who are listed on CERT-In’s list of approved certification bodies. SOC 2 reports should be requested from the vendor’s auditor and not the vendor because the auditor can provide the most up-to-date version of said report.
Be sure you review the certificate scope thoroughly—certifications are only valid for the locations, systems, and processes specified. An ISO 27001 certified vendor for their office in Bangalore does not magically extend protection to their Hyderabad branch office or an acquired subsidiary.
Verify the certificate has not expired, and if and when recertification is required. Certificates expire and surveillance audits are required to be conducted timely manner to maintain their validity. Vendors are occasionally known to still have the expired certificates up and running on their websites, in the hopes their clients won’t realize.
Obtain recent audit(s) for SOC 2 Type 2 that demonstrate ongoing (Sustained) compliance (often 6-12 months) rather than SOC 2 Type 1 reports that are point-in-time evaluations. Inquire specifically to any findings or exceptions disclosed on the reports and how those findings have been remediated.
Know the potential conceptual biases behind standards that indicate the existence of management systems and controls, but not necessarily the lack of incidents or perfect controls. Certifications are minimum bars, not excellence.
Legal contracts form the basis for all security, compliance, and IP protection— but that’s only true if they are well drafted with Indian law considerations in mind.
The MSA sets out the general terms of the relationship, and Statements of Work (SOWs) or Work Orders define individual projects:
Scope definition must provide a clear description of the deliverables, including their specifications, the acceptance criteria, the milestones, and the timeframes. Ambiguous scope leads to disputes where vendors raise additional work as ”out of scope” modifications for extra pay.
The intellectual property provisions mentioned previously should also be included in the MSA to vest any and all IP developed by you, with broad categories, temporal scope (during and post engagement), and waivers of moral rights.
Confidentiality provisions should be mutual (albeit lighter as to your obligations) and should include broad definitions of what constitutes confidential information, certain security measures, return/destruction provisions upon expiration or termination, and survival provisions to survive expiration or termination.
Data protection and compliance sections, which should identify the applicable regulations (GDPR, CCPA, DPDP Act), outline the vendor obligations as data processor, describe implemented security measures, include breach notification process and timelines, audit rights to verify your compliance, and sub-processor approval.
Service level agreements (SLAs) specify availability, response times, bug fix turnaround times, hours of support, and escalation procedures with financial penalties in case of failures. If there are no SLAs, vendors aren’t held accountable for poor performance.
The warranties and representations from the vendors should state, among other things, that the vendors have the right and authority to enter into the agreement, that the license does not infringe the intellectual property rights of any third party, that the code complies with applicable laws, that the personnel assigned are qualified and experienced, that the code is original and that there is no malicious code or security vulnerabilities.…
Be careful to negotiate the limitation of liability provisions. Vendors normally try to limit their liability to the amount they were paid under the contract, which is insufficient in cases of IP theft, data breaches, or regulatory violations that can cost millions. Negotiate carve-outs from caps for intellectual property infringement, data breaches, confidentiality breaches, and wilful misconduct.
Right to Terminate: Termination rights must include the right to terminate without cause (upon payment of termination fees), the right to terminate with cause upon the vendor’s failure to meet material requirements, and the right to terminate immediately upon material breach. Add transition assistance requirements: vendors must assist with knowledge transfer, code handover, and migration to new vendors for 30-90 days post-termination.
Dispute resolution clauses should designate Indian courts (if you are comfortable with Indian jurisdiction) or arbitration under certain international rules (SIAC, LCIA, or ICC), specifying the venue and applicable law. Compared to litigation, arbitration often offers faster and more predictable outcomes, particularly for international cases of both sides.
The governing law is generally Indian law in case of Indian vendors; however, sometimes sophisticated parties will opt for a neutral jurisdiction such as Singapore or English law. Indian law is generally supportive of enforcing good contracts, so the choice of jurisdiction is often less important than the quality of the contract.
GDPR compliance also means that you will have to have separate Data Processing Agreements in place with each vendor that acts as a data processor processing the data of EU residents on your behalf:
Processing instructions specify which data the processor may use, for what purpose, with what safeguards, and at whose instruction.
Sub-processor clauses require your consent prior to the appointment of a sub-processor, and flow down the same obligations to the sub-processor in the form of a contract.
Service commitments obligate the Vendors to assist you in responding to such data subject access requests, deletion requests, and regulatory inquiries.
Data breach notification timelines should be immediate (within 24 hours) to preserve your ability to meet the 72-hour GDPR breach notification deadline to supervisory authorities.
Audit rights enable you to test for GDPR compliance – onsite, via questionnaires, or through third-party audits. A lot of vendors are resistant to audits; negotiate these rights the first chance you get prior to signing.
International data transfers from the EU to India are governed by the Standard Contractual Clauses (SCCs) that the EU Commission has approved, and come with a set of standard provisions and documentation requirements.
This timeline visualization tells us that the end-to-end process for the compliance certification takes 34 weeks, including 12 weeks for technical execution, which is the longest stage
The cost of adding security and compliance after a software is finished is 10-100 times the cost of doing it right the first time in the development process. Embed security in development by taking these sequential steps:
Mapping regulatory requirements determines which laws and regulations you should comply with based on your target markets, the locations of your users, and the types of data you collect. An app catering solely to users in India must comply with DPDP; open it to users in Europe, and you’ll need GDPR; customers in California bring CCPA.
Data mapping and classification is an inventory of the type of personal data that the Application collects, where it is stored, the flow of the data across systems, who the data is accessible to, how long the data is retained, and how the data is deleted. All privacy and security efforts are based on this data map.
Threat modeling is a process by which potential attack vectors, vulnerabilities, threat actors, and impacts are identified in a structured manner using methodologies such as STRIDE or DREAD. Threats are known in advance, thus allowing the design of defenses.
Vendor evaluation evaluates a prospective partner in India business development according to their certifications, their security practices, references, legal jurisdiction, financial viability, and cultural fit.
Security evaluation assesses compliance status with the regulations and best practices of the industry and identifies gaps for remediation. For applications that are not new, vulnerability assessments and penetration tests identify vulnerabilities that must be remediated prior to release.
Privacy architecture design incorporates the principles of privacy by design, such as data minimization, purpose limitation, encryption, access controls, anonymization/pseudonymization, and management of user consent.
The compliance mandate document is a conversion of legal requirements into technical requirements that developers can work with. For example, the right to erasure established by the GDPR turns into hard-delete functionality, which drops the information from databases, backups, logs, and caches.
Privacy policy drafting results in user-facing notices that address what information is collected, how it is used, with whom it is shared, how long it is retained, the rights of users, and how to contact the organization in a language that is easy to understand. Policies must be easy to find before data collection occurs, not hidden in menus or behind links.
The terms of service define the legal relationships, rights, and obligations of the users and services, such as limitation of liability, user obligations, termination procedures, and dispute resolution. Different terms of use may be required for different types of users (consumers, businesses, minors).
Contract negotiation with vendors includes the MSA, SOW, DPA, NDA, and the IP assignment agreements based on all the areas of protection that were covered earlier.”
An organization’s or product’s policies for its employees and vendors may cover security, access controls, incident response, data retention, and training.
Secure SDLC development processes ensure security is incorporated in each phase of the life cycle. Requirements state security constraints; design uses defense-in-depth; coding follows a secure coding standard; testing includes security test cases.
The implementation of security controls includes deploying encryption (AES-256 for at-rest data, TLS 1.3 for in-transit data), access controls (RBAC, MFA), audit logging, intrusion detection, DDoS protection, API security, and mobile-specific protections.
Compliance capabilities create functionality that supports compliance obligations: consent management systems that capture, document, and honor consent preferences; data subject rights workflows for requests of access, correction, and deletion; age verification to protect children’s data; cookie consent management; and privacy preference centers.
Testing and QA confirm that security controls are effective, compliance features operate correctly, and that there are no vulnerabilities in their products via functional testing, security testing (static analysis, dynamic analysis, penetration testing), compliance testing, and user acceptance testing.
Security awareness training brings knowledge about various aspects such as security policies, secure coding, social engineering threats, incident reporting, and data handling to developers, administrators, and users.
Compliance training educates teams on their legal and privacy obligations, as well as the nature of data under GDPR, CCPA, DPDP Act, and industry regulations.
Internal audit confirms the application via requirements gap analysis, verifications of policy conformance, testing of the effectiveness of security controls, and evaluation of readiness for compliance.
Remediation is taken to resolve weaknesses identified during internal audit; in effect, remediation is fixing things prior to external audits.
Pre-launch security review by independent penetration testing companies exposes any final vulnerabilities before going live.
ISO 27001, SOC 2, or other standards’ certification audits take place (if going for cert), consisting of a Stage 1 audit (documentation review) and a Stage 2 audit (implementation review).
Release preparation: A final security review, backup and disaster recovery testing, incident response plan validation, support team training, and monitoring system activation are among the activities performed during release preparation.
Go-live deploys the application to production and involves a period of heavy production monitoring for the first few weeks so that any problems can be detected quickly.
Security surveillance via SIEM, IDS, vulnerability scans, and log analysis is being watched 24/7.
Compliance monitoring monitors continuous compliance with policies, procedures, and regulations through periodic audits, policy updates, and training.
Response to an incident is a reactive phase for a security incident or similar (see list below), and it is performed based on so so-called response plan, which is a pre-defined and documented procedure for containing, investigating, mitigating, informing, and recovering from an incident.
Updates and patches help keep security up to date as new vulnerabilities are discovered and regulations change.
Surveillance audits for certifications take place every 6-12 months, with recertification every 3 years.
Learn from the mistakes of others if you don’t want to make them in your projects:
The error: Thinking that having an Indian vendor that’s ISO 27001 certified means your app is automatically GDPR/CCPA/DPDP compliant.
The reality: Vendor certifications attest to their internal controls, not your application’s compliance. You are still the data controller that has the legal responsibility to be compliant – even when you use certified processors.
The fix: Add compliance at “the application level” (consent management, DS rights, privacy policies), and confirm that vendors meet your specific needs via audits and DPAs.
The error: Dependence on “we’ll own the code since we’re paying for it” kind of assumptions without written assignments.
The reality: Copyright under Indian law is vested with the creators (developers) and not the clients unless there are explicit contracts which state otherwise. Many companies find out they don’t own their software when they try to sell the company, change vendors, or enforce IP rights.
The fix: Sign an all-encompassing IP assignment agreement prior to development that addresses every category of IP, including a moral rights waiver and work-for-hire statement.
The blunder: Giving vendors full admin access, access to the production environment, and access to customer data “to make their job easier”.
The truth: Too much access leads to security holes, compliance violations (data minimization), and audit failures.
The fix: Enforce least-privilege access with role-based access, review access regularly, log everything, and have a way to grant temporary access.
The error: Beginning development without having documented what data will be collected, where it is stored, how it moves, and who touches it.
The reality: You cannot protect what you do not know you have. Data mapping is the basis for all privacy and security controls.
What to do: Develop detailed data maps in advance of designing architecture and revisit these as requirements change.
The error: Not having breach detection, response, and notification policies in place because “we’ll cross that bridge when we come to it”.
The reality: DPDP mandates notification within 72 hours, similar to GDPR, with delays attracting further penalties of up to ₹200 crore. Without processes, you can’t fulfil these deadlines.
The fix: Document incident response plans, run tabletop exercises, define vendor notification requirements (within 24 hours), and develop contacts for regulatory notification.
The error: Choosing vendors just on the basis of price and portfolio, without checking out security practices, certifications, legal structure, or compliance abilities.
The reality: When your service provider suffers a data breach, runs a project into the ground, or gets tied up in IP disputes, it’s your failure, too.
The fix: Establish a strict vendor evaluation process for certifications, security practices, compliance programs, financial well-being, insurance coverage, references, and legal jurisdiction.
Security, compliance, and intellectual property protection are not barriers to overcome, but pillars on which sustainable business growth is built. When your app is developed in India, these issues take on even greater importance due to jurisdictional complexity, regulatory variation, and the inherent risk of offshore development relationships.
The regulatory environment has matured substantially with India’s DPDP Act enabling one to bring penalties up to ₹250 crore, GDPR fines up to 4% of revenue, and CCPA creating private rights of actions, which further allow class actions. Intellectual property theft risk, an average cost of $739K for a data breach, and vendor access control failures all combined to make the compliance imperative clearer than ever.
But all these challenges are eminently manageable through standards-based approaches: comprehensive contracts that assign IP rights and impose security obligations; technical measures that implement privacy by design and security controls; vendor access controls based on least-privilege principles; certification validations that provide independent assurance; and continuous monitoring that ensures compliance as regulations evolve.
The upfront expenditure on good security and compliance — around $181,000 for initial implementation and $30,000 a year for maintenance — is a small fraction of the cost of remediating a single breach or a stalled fundraising round caused by disputes over IP ownership. Strong security and compliance also build competitive advantages by allowing companies to enter regulated markets, win enterprise contracts that require certifications, and establish trust with users through proven standards of data protection.
With the Indian development ecosystem evolving with increasing compliance awareness and more vendors getting international certifications, it will be the companies that view security and compliance not as an afterthought but as part of the core engineering of their solutions from day one that will prosper in the long run. The success of your app depends not only on well-written code and great features but also on the legal and technical underpinnings that safeguard your users, your business, and your future.
