The Ministry of Electronics and Information Technology (MeitY) recently amended the Aadhaar Act to allow private entities to use Aadhaar authentication. This move aims to enhance service delivery and ensure consent-based data processing across various sectors, including e-commerce, travel, healthcare, and others. However, to leverage Aadhaar, private firms need to understand the regulatory requirements around privacy, data security and compliance.
This article will clarify what the notification entails and what private players must do to offer Aadhaar-based services legally and securely.
Expanding the Scope of Aadhaar
Previously, Aadhaar authentication was restricted to banks, telecom firms and government services. The latest amendment now permits voluntary use across the private sectors, including:
- E-commerce
- Travel and hospitality
- Healthcare
- Other digital platforms
This will boost innovation in service delivery, such as seamless hotel check-ins, quicker deliveries, and enhanced customisation. However, protecting data privacy remains paramount.
Hence, strict protocols around consent, transparency and security must be instituted. Private entities must register with the UIDAI through a designated portal and ensure full compliance with all applicable regulations.
Adhering to Regulations Around Aadhaar Usage
Under the Aadhaar Act 2016, specific requirements exist for offering Aadhaar-based services:
1. Explicit Consent
Users must be informed about the authentication process and the purpose of data collection. Prior explicit consent is mandatory.
2. Minimal Data Capture
Only necessary attributes should be accessed. Excess data collection is prohibited.
3. Purpose Limitation
Data can only be used for the exact purpose stated during the consent process. No further processing is allowed.
4. Security Safeguards
Entities must have robust cybersecurity controls, encryption mechanisms and access protocols in place.
5. Grievance Redressal
Users must have precise grievance redressal mechanisms that are easily accessible to address their concerns.
6. Annual Audit
Regular third-party audits are mandated to ensure continued compliance.
Any violations will invite penalties under the Aadhaar Act. Hence, understanding the regulatory landscape is key before adoption.
Process for Private Entities to Offer Aadhaar Authentication
1. Application Submission
Interested companies must apply on the UIDAI’s portal, providing details of the proposed usage.
2. Examination by UIDAI
UIDAI will scrutinise applications to gauge data security preparedness.
3. Approval by MeitY
Final approval will be granted based on UIDAI’s recommendations.
4. Integration With Platform
Once approved, APIs can be integrated into the entity’s systems.
5. Testing and Audit
Extensive testing will be conducted before the system goes live. Annual audits are also needed.
6. Renewal of Approval
– Approvals will require periodic renewals. Updated audits have to be furnished.
By investing in robust data infrastructure, private players can securely unlock the power of Aadhaar. However, continuous self-appraisals and upgrades are essential for maintaining sustainable compliance.
Benefits of Expanding Aadhaar Authentication
Some key advantages include:
For service providers:
- Enhanced service delivery and customisation
- Innovation in offerings like seamless travel, personalised healthcare
- Prevent identity fraud losses through Aadhaar multi-factor authentication
- Reduce costs by digitising paper-based processes
For consumers:
- Secure consent-based data sharing across services
- Convenience of single digital identity verification across platforms
- Control over personal data usage
- Minimise identity fraud
For the government:
- Expand secure digital governance
- Enforce compliance standards across sectors
- Innovation towards a privacy-first digital economy
- Consistent citizen experience across services
By upholding consent, privacy and security protocols, Aadhaar usage can accelerate India’s digital public infrastructure.
Conclusion
The voluntary adoption of Aadhaar by regulated private entities promises to stimulate digital innovation and enhance service delivery while prioritising consent and data privacy. However, the success of this policy amendment depends greatly on awareness and compliant implementation.
Strict audits and updates to existing infrastructure will be vital for private players to demonstrate continual adherence. Additionally, clear communication and consent flows for consumers must be ensured. Overall, the expansion marks a new era of responsible data sharing between public and private digital ecosystems, paving the way for an integrated and secure digital economy.
FAQs
1. Does the Government extend Aadhaar authentication to private entities for better services?
Yes, the government has amended the Aadhaar Act to allow private entities, such as e-commerce and healthcare firms, to use Aadhaar authentication to enhance service delivery. This ensures secure, consent-based transactions for a better user experience.
2. What is the Aadhaar Amendment 2025?
The Aadhaar Authentication for Good Governance Amendment Rules, 2025, permit private entities to utilise Aadhaar for voluntary authentication to enhance services in sectors such as travel and healthcare, subject to strict privacy and compliance regulations.
3. What sectors can use Aadhaar authentication under the 2025 amendment?
Private entities in e-commerce, travel, tourism, hospitality, and healthcare can now utilise Aadhaar authentication to verify user identities securely. This expands its use beyond banks and telecom.
4. How do private entities get approval to use Aadhaar authentication?
Private entities must apply through the UIDAI portal, detailing their use case, and get approval from MeitY after UIDAI reviews their data security measures.
5. Why is user consent essential for Aadhaar authentication?
User consent is mandatory to ensure transparency about how Aadhaar data is used, protecting privacy and preventing misuse by private entities.
