AI Data Compliance in Australia and India

What Australian and Indian law require when you put business data through an AI model — APP 8, APP 1.7 and the DPDP Act. General information, not legal advice.

What the law actually requires when you put business data through an AI model — in two jurisdictions that are about to diverge sharply, and a cross-border rule that most buyers and most vendors read the wrong way round.

General information, not legal advice. This page cites the OAIC's published guidance and the text of the DPDP Act 2023. It is not a substitute for advice on your own circumstances, and you should take your own before relying on any of it.

The short answer

Putting business data through an AI model is not a new category of activity in either country's privacy law. It is collection, use and disclosure of personal information, assessed under rules that already exist. In Australia those rules are in force today. In India the equivalent rules are enacted but their substantive obligations have not yet commenced.

In Australia the question is not whether the Privacy Act 1988 applies to your AI deployment — it does — but which Australian Privacy Principles bite, and the cross-border one turns on a contractual detail most buyers never check. In India the question is what you should be building towards before mid-May 2027, when the Digital Personal Data Protection Act 2023's substantive provisions commence.

Australia: which Australian Privacy Principles bite

OAIC guidance, as a matter of best practice, recommends that organisations do not enter personal information, and particularly sensitive information, into publicly available generative AI tools. Guidance on privacy and the use of commercially available AI products, published 21 October 2024, updated 17 January 2025.

• APP 3 — sensitive information. The OAIC: if you use AI to generate or collect sensitive information about a person, to comply with APP 3 you will usually need to obtain consent. And consent cannot be implied merely because an individual was notified.
• APP 6 — secondary use. Feeding data you already hold into an AI system is usually a secondary use, and the OAIC's position is that in many cases it will be difficult to establish that a secondary use for AI-related purposes was within reasonable expectations.
• APP 8 and section 16C — cross-border. Reasonable steps to ensure an overseas recipient does not breach the APPs, usually through an enforceable contract, with continuing liability under section 16C for what that recipient does.
• APP 10 — accuracy. The OAIC calls generative AI probabilistic in nature, warns about hallucinations, and says outputs should be treated as statistically informed guesses with appropriate human oversight.

The APP 8 question most buyers get wrong

The OAIC treats giving personal information to an overseas provider as a use rather than a disclosure where a binding contract limits the provider to performing the service, binds its subcontractors on identical terms, and leaves you with effective control — the right to access, change or retrieve the information, and the right to determine who else may access it and why.

That last condition is where most AI deployments fail. A provider whose terms permit it to use your inputs for its own model training does not leave you with effective control over who else may access the information and why. The transfer is then a disclosure, APP 8 applies, and section 16C keeps you liable for what the recipient does with it.

Where the transfer is a disclosure, APP 8.2(a) allows a reasonable belief that the recipient is subject to a law or binding scheme substantially similar to the APPs with accessible enforcement mechanisms, and APP 8.2(b) allows consent — but only after expressly informing the individual that APP 8 will not apply and that they will not be able to seek redress under the Privacy Act.

What changes in Australia on 10 December 2026

The Privacy and Other Legislation Amendment Act 2024 inserts APP 1.7 and APP 1.8, commencing 10 December 2026. A privacy policy must then set out the kinds of personal information used in computer programs that make, or substantially assist in making, decisions; the kinds of decisions made solely by such programs; and the kinds of decisions where something substantially and directly related to making the decision is done by such a program.

It covers substantially-assisted decisions, not only fully automated ones. It applies to decisions made after commencement even where the personal information was collected, or the program was already in use, beforehand. There is no transitional relief.

India: enacted, not yet in force

Sections 3 to 17 and 28 to 34 of the Digital Personal Data Protection Act 2023 — application, notice, consent, Data Fiduciary duties, Significant Data Fiduciary obligations, data-principal rights, the cross-border provision and the whole penalty regime — commence eighteen months after the DPDP Rules 2025 were published in the Official Gazette, which falls in mid-May 2027. Consent Manager registration commences one year after publication, in late 2026. Today only the Data Protection Board and the administrative provisions are live.

Section 8(1) makes the Data Fiduciary responsible irrespective of any agreement to the contrary, so liability cannot be contracted away. Section 8(2) requires a processor to be engaged under a valid contract, and unlike GDPR Article 28(3) there is no prescribed schedule of clauses to copy. Significant Data Fiduciary status is designated by the Central Government, not self-assessed, and there is no volume threshold that triggers it.

Analysis, not statute: the Fiduciary and Processor split maps onto an AI vendor relationship in the obvious way, but no Indian regulator has published guidance applying that split to AI providers and there is no case law. Treat the mapping as our reading of the Act and confirm it with your own advisers.

The two regimes side by side

• Cross-border transfer — Australia: APP 8 applies, with reasonable steps and continuing liability under section 16C. India: permitted by default; section 16 is a negative list of notified countries, no country has been notified as at 29 September 2026, and section 16 has not yet commenced.
• Automated and AI-assisted decisions — Australia: privacy-policy disclosure required from 10 December 2026. India: no equivalent; the Act contains no reference to automated decisions, profiling or artificial intelligence, and confers no right to human review or explanation.
• Breach notification — Australia: the Notifiable Data Breaches scheme, where unauthorised access, unauthorised disclosure or loss is likely to result in serious harm and remedial action has not prevented that risk. India: affected data principals without delay and the Data Protection Board within 72 hours, with no materiality threshold, once the relevant provisions commence.
• Penalties — Australia: civil penalty provisions apply and have been amended more than once; take the current figure from the Act itself. India, from commencement: up to ₹250 crore for failure to take reasonable security safeguards and up to ₹200 crore for failure to notify a breach.
• Reach beyond the border — Australia: the Privacy Act binds APP entities, reaching overseas recipients indirectly through APP 8 and section 16C. India: section 3(b) applies the Act to processing outside India relating to offering goods or services to data principals in India, with no monitoring-of-behaviour limb.

What to check before data reaches a model

• What the product was trained and tested on.
• The provider's security measures.
• Whether the service terms give the developer access to the data you input. This is the question that decides whether your transfer is a use or a disclosure, and therefore whether APP 8 applies at all.
• Whether the data includes sensitive information, and whether you hold consent for it under APP 3.
• Whether this is a secondary use of data you already hold, and what the individual was told when you collected it.
• Which step reviews the model's output before anyone relies on it, and who owns that step.
• Whether the decisions this system makes, or substantially assists in making, will need to be described in your privacy policy from 10 December 2026.
• The OAIC warns specifically against a set-and-forget approach to AI products. Due diligence at procurement is the start of the obligation, not the discharge of it.

What this page does not claim

We are not a certification body and hold no certification of our own; what we produce is documentation you can put in front of your own auditor or procurement team.

We do not publish prices; cost is quoted against a defined scope after a discovery conversation.

Nothing here is legal advice, and nothing here describes work done for a client. Where a figure or a date could not be confirmed against a primary source, it has been left out rather than estimated.

Frequently asked questions

Can we put personal information into a public generative AI tool?

The OAIC's published position is that as a matter of best practice, organisations should not enter personal information, and particularly sensitive information, into publicly available generative AI tools. That is guidance rather than a prohibition, but departing from it puts the burden on you to show how the relevant Australian Privacy Principles were satisfied.

Does sending data to a US-hosted AI model breach Australian Privacy Principle 8?

Not automatically, and the answer turns on the vendor's contract rather than on where the servers are. The OAIC treats giving personal information to an overseas provider as a use rather than a disclosure where a binding contract limits the provider to performing the service, binds subcontractors on identical terms, and leaves you with effective control — the right to access, change or retrieve the information and to determine who else may access it and why. A provider whose terms permit it to use your inputs for its own model training does not meet that test, so the transfer is a disclosure and APP 8 applies.

Do we need consent to put existing customer data through an AI system?

Usually you need consent or a fresh notice. Using data you already hold for an AI purpose is a secondary use under APP 6, and the OAIC's position is that in many cases it will be difficult to establish that a secondary use for AI-related purposes was within the individual's reasonable expectations.

Is India's DPDP Act in force?

Not the parts that impose obligations on business. Sections 3 to 17 and 28 to 34 of the Digital Personal Data Protection Act 2023 commence eighteen months after the DPDP Rules 2025 were published in the Official Gazette, which falls in mid-May 2027. Consent Manager registration commences one year after publication, in late 2026. Today only the Data Protection Board and the administrative provisions are live.

Does India restrict sending personal data overseas?

By default, no. Section 16 operates as a negative list: it lets the Central Government restrict transfer to countries it notifies, rather than permitting transfer only to approved ones. No country has been notified as at 29 September 2026, and section 16 has not yet commenced. This is the mirror image of Australia's APP 8 and it is the provision most often reported the wrong way round.

What changes for automated decisions in Australia on 10 December 2026?

APP 1.7 and APP 1.8, inserted by the Privacy and Other Legislation Amendment Act 2024, commence. From that date a privacy policy must set out the kinds of personal information used in computer programs that make or substantially assist in making decisions, the kinds of decisions made solely by such programs, and the kinds of decisions where something substantially and directly related to making the decision is done by such a program. It covers substantially-assisted decisions, not only fully automated ones, and it applies to decisions made after commencement even where the personal information was collected, or the program was already in use, beforehand. There is no transitional relief.

SWAGARISTS INC

Enterprise IT solutions and digital transformation — AI automation, cybersecurity, cloud services, custom development and digital marketing. Offices in Vadodara, Gujarat (India) and Brisbane, Queensland (Australia). Email business@swagaristsinc.in · India +91 90235 06204 · Australia +61 452 270 475.