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The Third Party Processor Agreement is essential for organizations in India that engage external parties to process personal data on their behalf. This document has become increasingly critical with the implementation of the Digital Personal Data Protection Act 2023 and related data protection regulations in India. It is used when a company (the data controller) wishes to outsource data processing activities to a third party (the data processor), ensuring proper data handling, security measures, and regulatory compliance. The agreement covers crucial aspects such as processing limitations, security requirements, breach notifications, audit rights, and data transfer restrictions. It also addresses specific Indian regulatory requirements including data localization rules and cross-border transfer mechanisms. This document is particularly important for companies dealing with sensitive personal data or operating in regulated sectors where data protection compliance is paramount.

1. Parties: Identification of the Data Controller (Principal) and the Data Processor, including their registered addresses and company details

2. Background: Context of the agreement, relationship between parties, and purpose of data processing activities

3. Definitions: Definitions of key terms used in the agreement, aligned with DPDP Act 2023 and other relevant legislation

4. Scope and Purpose of Processing: Detailed description of the processing activities, types of data involved, and purposes of processing

5. Obligations of the Data Processor: Core responsibilities including processing only on documented instructions, confidentiality, security measures, and breach notification

6. Technical and Organizational Measures: Security requirements, access controls, encryption standards, and other protective measures

7. Sub-processing: Conditions and requirements for engaging sub-processors, including approval process

8. Data Subject Rights: Processor's obligations in assisting the controller with data subject requests

9. Data Breach Management: Procedures for identifying, reporting, and managing data breaches

10. Audit Rights: Controller's rights to audit and processor's obligations to demonstrate compliance

11. Term and Termination: Duration of the agreement, termination circumstances, and data deletion/return obligations

12. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification provisions

13. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes