India Expands Aadhaar Authentication Access to Private Sector Under New Rules

India’s Ministry of Electronics and Information Technology (MeitY) has announced new rules expanding voluntary Aadhaar authentication capabilities to private sector entities, marking a significant shift in the country’s digital identity landscape. The Aadhaar Authentication for Good Governance Amendment Rules, 2025, extends authentication access to businesses in hospitality, travel and tourism, e-commerce, and healthcare sectors.

Under the new framework, private entities must obtain approval from relevant government ministries and the Unique Identification Authority of India (UIDAI) before implementing Aadhaar authentication services. The amendment aims to enhance service delivery and improve access to services for citizens while maintaining privacy and security standards established under the Aadhaar Act.

This expansion follows several recent developments in India’s digital identity ecosystem, including the mandatory Aadhaar verification for new mobile SIM cards and the implementation of Aadhaar-based digital KYC for postal savings accounts.

The government maintains that the amendment promotes good governance, social welfare, and innovation. “The amendment seeks to enhance the scope and utility of Aadhaar authentication to further promote good governance, social welfare, innovation, and knowledge dissemination allowing the usage of Aadhaar for improving service delivery,” according to MeitY’s official statement.

However, the expansion has drawn scrutiny from privacy advocates. Supreme Court advocate-on-record Prasanna S has noted that the 2025 amendment “attempts to virtually re-legislate what was struck down,” referring to previous restrictions on private sector Aadhaar authentication.

Private entities implementing Aadhaar authentication must comply with strict privacy standards and security requirements under both the Aadhaar Act and Digital Personal Data Protection (DPDP) Rules. These requirements include obtaining authenticated consent for processing personal data and maintaining secure data handling practices.

The move comes as India has also recently implemented new security features for the Aadhaar system, including a biometric data locking mechanism to combat fraud and enhance user privacy control.