Aadhaar has long been the foundation of India’s digital identity framework, streamlining access to essential government services.
Now, its scope is set to expand dramatically, revolutionising its impact across sectors. With the recently announced Notification of Aadhaar Authentication for Good Governance (Social Welfare, Innovation, Knowledge) Amendment Rules, 2025, Aadhaar authentication will extend beyond public services into private sectors such as e-commerce, healthcare, tourism, and more.
This shift marks a major evolution in digital identity verification, further strengthening Aadhaar’s role as a key pillar of seamless and secure governance in the digital era.
Aadhaar: From One More OVD to India’s Own Social Security Number
Over the years, Aadhaar authentication has evolved from a basic identity verification tool to a critical component in financial services, telecom, and various private sector applications.
Aadhaar’s integration into private services began in 2019 with the Aadhaar and Other Laws (Amendment) Ordinance, allowing private companies such as banks and telecom firms to use Aadhaar for KYC verification under strict conditions.
By 2023, many private sector companies had adopted Aadhaar-based authentication, signaling its growing acceptance beyond government services.
Now, Aadhaar authentication is set to expand even further, reaching industries such as e-commerce, travel, hospitality, and healthcare—where both businesses and consumers can benefit from faster, more reliable access to services.
This continued adoption has paved the way for the 2025 amendment, which aims to formally extend Aadhaar’s reach across both public and private sectors, enabling new and innovative use cases for seamless consumer adoption and service delivery.
Aadhaar is no longer just about government transactions—it is evolving into a system of paperless identity validation, driving frictionless service experiences across industries.
Understanding the 2025 Amendment
The Aadhaar Authentication for Good Governance (Social Welfare, Innovation, and Knowledge) Amendment Rules, 2025 were introduced to expand the use of Aadhaar authentication in India.
Announced on January 31, 2025, these amendments aim to enhance governance, improve public services, and streamline access to essential services across various sectors.
Key Amendments:
1. Expanded Usage
The amendment allows both government and private organisations to use Aadhaar authentication for identity verification.
This expansion broadens Aadhaar’s application, enabling more entities to deliver secure and reliable services to users.
2. Improved Access to Diverse Services
The primary goal is to simplify and enhance access to Aadhaar’s eKYC service while enabling industry participants across various sectors to design and adopt processes with minimal identity verification bottlenecks.
3. Strengthening Governance
The amendment aims to foster transparency and inclusivity in decision-making.
By leveraging Aadhaar for authentication, the government and private sector participants can optimise consumer identity validation and service delivery, making the entire ecosystem more efficient and transparent.
How It Works
1. Application Process
The Unique Identification Authority of India (UIDAI) is set to launch a dedicated portal for private entities to submit applications for Aadhaar authentication.
According to Mr. Manish Bhardwaj, Deputy Director General of UIDAI, the portal will be launched within the next week, enabling private sector entities to apply for Aadhaar authentication services.
2. Evaluation and grant of license
As per the Ministry of Electronics and IT, entities wishing to use Aadhaar authentication must provide details of their intended requirements to the relevant ministry or department at the central or state government level.
The applications will be reviewed by UIDAI, with approval granted by MeitY based on UIDAI’s recommendation. Once approved, the concerned ministry or department will notify the entity of Aadhaar usage.
Intended Benefits
1. Ease of Living
By simplifying service access, the amendments aim to improve Indian citizens’ lives by making everyday tasks, such as booking tickets or checking into hotels, more seamless and transparent.
2. Fostering Innovation
The government envisions this move as a step toward encouraging innovation, sharing knowledge, and making services more accessible and efficient for everyone.
Why This Change Makes Aadhaar More Important Than Ever
1. Aadhaar is Becoming Ubiquitous
- The amendment significantly enhances Aadhaar’s relevance in daily life, paving the way for its use in routine activities such as booking flights and hotels, paperless check-ins, and storing and accessing medical records.
- Aadhaar’s usage is set to become a cornerstone for both businesses and consumers, making it more vital than ever
2. Simplifying Service Delivery
- Aadhaar eliminates the need for multiple verification steps, reducing friction in e-commerce, banking, and public services.
- Aadhaar’s role in governance ensures secure, fraud-free transactions, enhancing consumer confidence.
Challenges and Considerations
Here are the key considerations for the successful implementation of the new Aadhaar authentication amendments:
1. Data Privacy & Security
As Aadhaar’s usage expands among private entities, ensuring compliance with data protection laws will become even more critical.
Strict safeguards and operational checks must be implemented to protect sensitive information and prevent misuse.
2. Implementation & Accessibility
The integration of Aadhaar across sectors like e-commerce and healthcare must avoid creating barriers for users.
Ensuring accessible and reliable infrastructure, especially in underserved regions, is essential for seamless service delivery.
Summing Up
With the 2025 amendments expanding Aadhaar’s role across both public and private sectors, its significance in India’s digital infrastructure has reached new heights.
As Aadhaar usage grows, ensuring compliance with data protection laws and addressing accessibility challenges will be crucial for successful implementation.
To learn how ECS can help your organisation optimise customer identification and paperless onboarding processes while meeting the regulatory norms of the DPDP Act, please feel free to get in touch with our colleague Amit Joshi at 9820875525 / 7208155528 or via email at amit@eastcs.com.