India has relaxed its restrictions on the Aadhaar authentication service. The government is opening biometric-based verification for customers in sectors such as e-commerce, travel, hospitality, and healthcare. The move is said to improve service delivery, but it has raised concerns about privacy and the misuse of biometric data.
The new rules have been introduced by the Indian IT Ministry. The Ministry as part of the Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Amendment Rules, 2025, broadened the scope of Aadhaar authentication. This follows a 2020 update by a Supreme Court ruling restricting private businesses’ access to Aadhaar data.
Under the new rules, both the public and private departments will now be able to use Aadhaar authentication in different fields for the public good.
Aadhaar has been used so far by the banking and telecom sectors for customer onboarding and verification. Businesses in several other industries, including healthcare and e-commerce, can now implement Aadhaar authentication, increasing the reach of the biometric ID system.
To use Aadhaar authentication, firms need to approach the relevant ministry of the Government of India. Then, the government will evaluate the request based on the UIDAI and the MeitY recommendations. Thus, a regulatory system is inducted for further scaling up Aadhaar.
Updated rules have further stoked the issue of data privacy. Critics of Aadhaar feel that the scope for misuse in its authentication can grow with new developments. Section 57 of the Aadhaar Act, which enabled private players to use Aadhaar numbers to identify individuals, had been quashed by the Supreme Court earlier. Privacy activists demand more defined procedures for reviewing applications and ways of preventing abuse.
The authentications completed through Aadhaar increased to 129.93 billion in January 2025, up from the previous year's 109.13 billion. Among the main users who are taking the benefit of Aadhaar for verification include the State Bank of India and the National Health Agency. These organisations use it for improving customer service and access to benefits.
Despite the beneficial effects of Aadhaar expansion, concerns like exclusion, especially for vulnerable populations who have no access to digital services are being raised. Experts are asking to make this measure a voluntary participation rather than a mandate. It remains to be seen if the upcoming government clarification on the updates will resolve these public concerns.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.