Introduction: Trade Strategy in Context
India’s healthcare system is undergoing a change from an analogue to a digital system through government initiatives, policy reforms and technological developments. Along with a rapidly growing population and demand for quality healthcare services, digital health technologies such as telemedicine and electronic health records (EHR) are improving commencement, affordability, accessibility, and efficiency of service delivery in healthcare settings. Digital health fruits are being deployed to address regional gaps in health service delivery to both urban and rural areas using digital health technologies such as telemedicine, EHRs, and AI-driven diagnostics. While these developments are expected to help provide greater access to care, efficiency and quality of care, they also create a number of complex legal and regulatory issues. The legal framework governing digital health in India consists of a patchwork of sector / jurisdiction specific regulations, general technology law, and the provisions of the Constitution. This article analyzes the current regulatory structure for digital health and identifies any gaps that need attention while evaluating whether there is an adequate framework for addressing the regulatory issues associated with health technology and telemedicine platforms.
Healthcare Regulation and Legal Landscape
The Constitution of India: Under Article 47 of the Indian Constitution, health care is declared a Fundamental Right, laying the duty of raising the level of nutrition and the standard of living and improving public health upon the State. The lack of a specific Fundamental Right to Health has influenced regulatory methods and therefore permitted evolution in policy to catch up with technological progress associated with health care delivery. Formal legal recognition of Telemedicine practice in India was granted by the issuance of the Telemedicine Practice Guidelines by the Board of Governors of the Medical Council of India in March 2020; however, non-statutory nature does not have the power of formal law and thus Telemedicine cannot yet provide health care services through digital means, but only under certain prescribed standards, namely, (a) The professional and ethical standards applicable to in-person consultations must also apply to Telemedicine; (b) Telemedicine services are classified (audio, video or text) and each classification will contain its own compliance meet the requirements; (c) Consent (implied or explicit) must be obtained prior to providing tele-consultation; (d) The prescription of medication via telemedicine will be subject to certain restrictions.
The pharmaceutical industry is regulated by the Drugs and Cosmetics Act, 1940. This includes all aspects of the drug supply chain such as importing, manufacturing, distributing, and selling both drugs as well as diagnostic testing kits. While many digital health platforms interface with both diagnostic tests and the laboratories who provide the testing, the laws regulating the Drug Supply Chain do not specifically cover digital platforms that allow for the booking of appointments or reporting or integration of test results through digital means (such as e-mail). Therefore, organizations utilizing these digital platforms may be uncertain of what types of licensing and/or quality standards they must meet in order to operate legally within the pharmaceutical supply chain.
The Clinical Establishments (Registration and Regulation) Act, 2010 seeks to establish a uniform standard for all health care facilities. To date, 15 states and union territories have passed the Clinical Establishments Act. However, as the Clinical Establishments Act specifically addresses only physical infrastructure and services provided by health care facilities, the application of the Act to virtual clinics and telemedicine is unclear. The existence of this regulatory gap may result in the possibility of digital health care providers accessing regulatory arbitrage to escape the uniform accreditation and quality standards that apply to traditional health care establishments.
Technology and Data Protection Laws
Such a deal is a key plank of the Indian government’s economic policy to enhance economic ties with developed countries, move away from export dependence on developed markets such as the U.S. and EU, and offer pragmatic export opportunities for Indian MSME and services export sectors.
2. India-Oman Comprehensive Economic Partnership Agreement (CEPA)
The Information Technology Act, 2000 (IT Act) is the principal law of India governing enacting digital activity electronically, while establishing the legality of electronic records/digital signatures and placing certain due diligence obligations on intermediaries (including all hosting platforms). However, sensitive health data is not specifically regulated by the IT Act; however, Section 43A places a duty on regulated entities to take reasonable security measures regarding sensitive personal data, and Rule 3 of the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) rules (2011) defines health data as “sensitive personal data” under the definition contained in the said rules. The regime established under the IT Act and its regulations has also faced substantial criticism for its narrow application and lack of any enforceable rights to the data subject.
The 2023 Digital Personal Data Protection Act (DPDP Act) has been implemented in India in response to global trends and expanding digitalisation, which will provide greater data protection and ensure that individual data (“Data Principal”) has access to the right to access, correct, and delete their data, as well as create rules for Data Fiduciary’s obligations to process Data. In addition, all data classified as “sensitive personal data” must be treated as such, which will impose a much higher level of protection. Therefore, data on health care must be processed in accordance with the following obligations of the DPDP Act (2023) for health technology or telemedicine companies: (1) data will be processed for defined and legal purposes; (2) consent to process the data must be free, informed, related to the specific activity for which it was provided, and may be revoked; (3) only data that is necessary to accomplish the goal for which it was provided, will be processed; and, (4) “appropriate technical and organizational measures” are put in place to protect the data.
Legal Challenges in Regulating Digital Healthcare
The security and privacy of health records is of the utmost importance to the digital healthcare industry. Due to the sensitive nature of health records, unauthorized access, breaches and/or misuse can lead to serious individual privacy violations and/or discrimination. As a result, protecting health data is foundational to the regulations governing the digital health industry. Although the DPDP Act provides additional regulatory requirements, there are currently no regulatory bodies with the requisite health data expertise to enforce it. Binding Codes of Practice for healthcare organizations will also be established by the DPDP Act, but it is unclear whether/how organizations will meet these compliance obligations. Particularly in cases where a health organization uses a third-party cloud service provider to host its health data offshore, it creates additional legal and jurisdictional issues. Although cross-border transfer of healthcare data can occur under the DPDP Act, specific guidelines regarding the flow of healthcare data across borders have not yet been established.
Ethical standards do exist in the Telemedicine Practice Guidelines that require RMPs to follow them but there are limited ways to enforce those ethical standards. Any telemedicine complaints will be handled in consumer protection forums or with the professional governing bodies, and not through a separate regulatory structure specifically for digital health.
Interoperability and Standardization: Interoperability is one of the main goals in India’s digital health ecosystem through the National Digital Health Mission (NDHM) framework to provide an integrated health information infrastructure. This will be done through operational but not statutory standards. Therefore, compliance with those operational standards by private platforms is voluntary and may hinder engagement as well as create data silos, which will detract from creating a patient-centric and integrated healthcare system.
Policy Considerations and Recommendations
Data governance plays an essential role as service-specific, legally enforceable Codes of Practice governing how health data are to be processed have the capacity to convert the general principles of the Data Privacy and Data Protection Act (DPDP) into practice through stakeholder engagement. Typically, these Codes should define how to manage records, how to control access, how to encrypt data, what rules should apply to the cross-borders transfer of data, how to notify individuals in the event of a breach, and what rights of individuals as data subjects exist in a clinical environment. The establishment of a Health Data Protection Authority that is independent of the health sector, in conjunction with the Codes, will provide sector-specific oversight and enforce an effective and efficient system of dispute resolution.
Professional accountability can be improved within the healthcare industry through clarification of tort liability for the digital healthcare industry’s providers and manufacturers, particularly for those who provide technology that is driven by algorithms and/or by automated decision-making, establishing clinical validation and certification of medical software that employs artificial intelligence and machine learning, clarifying the role and liability of software developers, technology providers, and healthcare professionals for the use of algorithms in delivering healthcare, and strengthening oversight for telemedicine malpractice by enhancing rules of conduct and disciplinary processes under the medical council’s authority.
Interoperability should be supported through enforceable regulations. The National Digital Health Mission already has standards, but creating statutory backing will increase compliance by helping reduce fragmentation and improve the continuity of care within digital health systems. The establishment of a standalone Digital Health Act will serve to consolidate the many different sectoral regulations, clearly define the obligations of telemedicine providers, and develop enforceable standards for new technologies like AI and other emerging technologies that will impact healthcare. The protection of patients’ rights, accountability, and trust in India’s digital healthcare system can benefit from a legal framework that is aligned with technology advancements.
Sanjay Mishra is a seasoned legal professional and content contributor at LEGALLANDS LLP, bringing deep expertise in corporate law, taxation, and regulatory compliance. With years of experience advising businesses on legal structuring and operational governance, he provides pragmatic insights that blend statutory knowledge with business strategy.
At Legallands.com, Sanjay writes analytical articles on company formation, financial regulation, dispute resolution, and policy reforms, helping readers understand complex legal frameworks in a simplified, practical manner.
His work reflects a strong commitment to clarity, precision, and integrity in legal communication, empowering enterprises to make informed, compliant, and growth-oriented decisions.
Co-author: Prerna
