AI vendors as Data Processors under DPDP: contracts, logs and erasure

An AI scribe, chatbot or coding agent handling patient data for a hospital is usually a Data Processor. The hospital stays responsible, so the contract and the logs have to carry the weight.

The short answer

Picture your AI transcription vendor having a breach, and the questions landing at the hospital, not the vendor. Under India’s DPDP law, the hospital stays responsible for what its vendors do with patient data. So the contract has to carry safeguards, breach reporting, logs and deletion down to the vendor.

Yes, usually. The DPDP Act calls anyone who processes personal data on behalf of a Data Fiduciary a Data Processor, and an AI vendor that transcribes, summarises or acts on patient data for a hospital fits that description. The hospital remains responsible for that processing, may use the vendor only under a valid contract, and must make sure safeguards, breach reporting, one year of processing logs and erasure all reach the vendor.122

This is a plain reading of the Act and Rules for hospital and clinic teams. It isn’t legal advice, and nothing here makes any arrangement meet the law.

Deedglass runs on your own servers with your own Postgres. Every feature is free while we grow, so nothing checks a licence and, by default, nothing is sent to deedglass.com.

Fiduciary and processor in one paragraph

The Data Fiduciary decides why and how personal data is processed. In healthcare that is the hospital, clinic or doctor’s practice. The Data Processor processes it on the fiduciary’s behalf: the EMR host, the lab software company, the cloud provider and, now, the AI vendor. Section 8 of the Act puts the weight on the fiduciary: it is responsible for processing done for it by a processor, “irrespective of any agreement to the contrary”, and it may engage a processor only under a valid contract.1

So “the vendor handles that” is not an answer a hospital can give the Data Protection Board.

Five duties that follow the data to the vendor

Duty Where it comes from What it means for an AI vendor
Reasonable security safeguards, including for processing by a processor Act s8(5)1; Rule 6(1)2 Encryption or masking, access control and backups apply to the vendor’s systems too
Safeguard terms in the contract Rule 6(1)(f)2 The contract must say what safeguards the vendor takes
Logs of access, kept a year Rule 6(1)(c) and (e)2 The vendor’s access to patient data should be visible to you, with logs you can review
Processing logs kept a year, including by the processor Rule 8(3)2 Data, traffic data and logs of the vendor’s processing kept at least a year, then erased
Erasure by the processor Act s8(7)(b)1 When consent is withdrawn or the purpose is served, the vendor must erase what you gave it

The Rules’ own illustration is close to the AI case. A company uses a cloud provider as its Data Processor to host customer records; the company must ensure the provider also keeps the data and associated logs for at least a year before erasure.2 Swap “cloud provider” for “AI documentation vendor” and the logic carries over.

These duties start when Rules 6 to 8 come into force, eighteen months after their November 2025 publication.2

The log question

Rule 6 asks for “appropriate logs, monitoring and review” to detect unauthorised access, and Rule 8(3) asks for logs of processing to be kept for a year.22 With an AI vendor, there are two places those logs can live:

  1. The vendor’s own logs, which you see if the contract gives you access and the vendor keeps them.
  2. Logs on your side, written by your systems when the vendor’s tool reads or writes patient data through your APIs.

You want both, and you want the second one to be independent of the first. If the only record of what an AI tool read is the AI tool’s own log, you are relying on the processor to tell you about its own mistakes. For each AI action, a useful record on your side holds:

Field Example
When 2026-10-26T09:14:03+05:30
Which tool and which account scribe-integration, service account 7
On whose behalf Dr. A’s session, OPD 3
What it touched Encounter 88213, read; DocumentReference draft, create
What it changed Before and after digests, or ids, not the clinical text
Who approved Dr. A, 09:16

Keeping ids and digests instead of clinical text in the log lets you keep the log a year without making the log itself another copy of patient records.

Contract clauses to ask for

A short list to bring to procurement. Each line maps to a duty above.

  1. Purpose and data list. Exactly which data the vendor processes, and for what.
  2. Safeguards. Encryption, access control, backups, and who at the vendor can see patient data.2
  3. Breach notice to you, in hours. The hospital owes the Board a detailed report within 72 hours of becoming aware.2 A vendor that tells you in a week leaves you no time.
  4. Logs. Processing logs kept at least a year, available to you on request.2
  5. No other use. No training, product analytics or sharing beyond your purpose unless you agree in writing.
  6. Sub-processors. A list, and notice before changes.
  7. Erasure. Deletion when the purpose ends or consent is withdrawn, with written confirmation.1
  8. Location. Where data and logs are stored.

Our questions to ask an AI scribe vendor turns these into plain questions for a sales call.

When AI output drives a decision

Section 8(3) of the Act adds a duty that’s easy to miss. Where personal data is likely to be used to make a decision that affects the person, or disclosed to another fiduciary, the fiduciary must ensure its completeness, accuracy and consistency.1

An AI-drafted discharge summary that goes to another hospital, or an AI-coded claim that goes to an insurer, is exactly that kind of data. The duty sits with the hospital, not the vendor. In practice it argues for a named person reviewing what the tool produced before it leaves your system, and for a record of that review.

Limits of this reading

  • Whether a particular vendor is a processor or a fiduciary in its own right depends on the facts, especially if it uses your data for its own purposes. Ask counsel.
  • The Rules leave room for longer retention where another law requires it.2
  • Significant Data Fiduciaries carry more duties, covered in our DPDP Rules for hospitals overview.

For what a log of agent actions should hold, read AI agent audit logs under the DPDP Rules. For what Deedglass does around AI agent writes in hospitals, see /healthcare.

To try the checks on synthetic data, open the playground in your browser. To see what an AI agent on your machine can change, run npx deedglass scan (what the grade means) or paste its MCP config into /check; neither uploads your data. Our AI agent permissions report shows what public agent setups commonly leave open.

Written with AI assistance and checked against our claims register.

The takeaway

Under DPDP the hospital stays responsible for its AI vendor: put safeguards and erasure in the contract, and keep the vendor's processing logs a year.

Read nextThe DPDP Rules 2025 for hospitals: what changes, and by when Try it: install in 7 s

Related on this site

In the docs

More posts

Sources

  1. 1MeitY: The Digital Personal Data Protection Act, 2023 · meity.gov.in · checked 26 October 2026
  2. 2MeitY: Digital Personal Data Protection Rules, 2025 (G.S.R. 846(E)) · meity.gov.in · checked 26 October 2026

Published 26 October 2026, sources last checked 26 October 2026. If something here is out of date, write to hello@deedglass.com.

Try it on your own setup

npx deedglass scan

Grades only your own setup. Nothing is uploaded.

Pricing