Non-Disclosure Agreements (NDAs) in India
A Non-Disclosure Agreement (NDA) is a legally binding contract that establishes a confidential relationship between parties. In India’s competitive business landscape—whether sharing proprietary technology with a Pune-based vendor, discussing acquisition terms with a Mumbai PE firm, or onboarding employees at a Bangalore tech startup—NDAs are the first line of defence for trade secrets and sensitive information.
NDAs in India are governed by the Indian Contract Act, 1872 and enforceable through injunctions under the Specific Relief Act. Indian courts have consistently upheld NDAs in cases such as Diljeet Titus v. Mr. Alfred A. Adebare, recognising the right to protect confidential information.
Types of NDAs and When to Use Each
Unilateral NDA
One party discloses, the other receives. Used for employee onboarding, vendor engagement, and investor pitches.
Mutual NDA
Both parties share confidential information. Common in JV discussions, partnership evaluations, and M&A due diligence.
Multilateral NDA
Three or more parties. Used for consortium bids, multi-party technology collaborations, and complex licensing arrangements.
Drafting Enforceable NDAs Under Indian Law
- • Define “Confidential Information” precisely: Vague definitions weaken enforceability. List categories (financial data, source code, customer lists, business plans) rather than using catch-all language alone.
- • Specify permitted disclosures: Employees, advisors, and affiliates on a need-to-know basis who are bound by similar obligations.
- • Set reasonable duration: 2–5 years is standard. Indefinite NDAs may be challenged as restraint of trade under Section 27 of the Indian Contract Act.
- • Include return/destruction clause: Require return or certified destruction of all confidential materials upon termination.
- • Choose dispute resolution: Arbitration (under Arbitration and Conciliation Act, 1996) in a neutral Indian city provides faster resolution than courts.
Key Takeaways
- ✓ NDAs are enforceable in India under the Contract Act and Specific Relief Act
- ✓ Define confidential information specifically—vague definitions weaken protection
- ✓ Keep duration reasonable (2–5 years) to avoid restraint of trade challenges
- ✓ Include injunction clause for immediate court relief on breach
- ✓ Stamp duty varies by state—₹100 to ₹500 for most NDAs
Frequently Asked Questions
Are NDAs enforceable after employment ends?
Confidentiality obligations (unlike non-compete) survive employment. Courts distinguish between trade secrets (protected indefinitely) and general skills/knowledge (not protectable).
What remedies are available for NDA breach?
Injunction (most common), damages, specific performance, and account of profits. Courts can grant interim injunctions within days for urgent cases.