The government has revised the Aadhaar Act to let private companies use Aadhaar authentication for giving their services, according to a notification released on Friday.
In September 2018, the Supreme Court said that Section 57 of the Aadhaar Act could be “misused.” This section had permitted private companies to ask for and use Aadhaar authentication for business purposes.
The government has intiated new rules, the Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Amendment Rules, 2025. These rules allow private companies to use Aadhaar authentication if their proposal for the service is accepted.
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The notification says that any organization, other than a government ministry or department, wishing to use Aadhaar authentication must give a proposal. This proposal should explain why the authentication is needed for a specific purpose and how it benefits the public, and it must be sent to the relevant government ministry or department.
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The new rules are designed to allow Aadhaar authentication to be used on digital platforms for better governance, preventing misuse of social welfare benefits, and promoting innovation and knowledge sharing.
One important point to be noted is that using Aadhaar authentication will be voluntary.
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If a private company submits a proposal and the relevant ministry or department finds that it meets the criteria highlighted in the rules and benefits the public, the proposal will be forwarded to the central government with recommendations.
The Unique Identification Authority of India (UIDAI) and the Ministry of Electronics and IT (Meity) will go through the application and grant approval for Aadhaar authentication based on UIDAI’s recommendations. Once Meity confirms, the relevant ministry or department will notify the company about using Aadhaar.
The Ministry of Electronics and IT explained that this change aims to improve transparency and inclusivity in decision-making. It will allow both government and private entities to use Aadhaar authentication to offer services in the public interest, like improving access to services, supporting innovation, and making life easier for residents. This will benefit both service providers and customers to have trusted transactions.
The change will give advantage to people using services in sectors like e-commerce, travel, healthcare, and tourism, even if the providers are not government-based.
Any private company willing to use Aadhaar authentication must submit an application with the required details to the relevant government ministry or department, which will be available through an online portal.
