Are NDAs legally binding in India? A guide for employers [2025]

If you're hiring in India, non-disclosure agreements (NDAs) can help you protect sensitive business information. Implementing them correctly ensures that new employees and third parties treat your business plans, trade secrets, and other kinds of proprietary information with caution.

But NDAs aren't guaranteed to hold up in Indian court of law, as terminated employees are entitled to protections against confidential information that interferes with them being able to reasonably find future work.

Read on to discover how NDAs are used in India, what they should include to make them enforceable, and pitfalls to avoid before invoking them.

What is an NDA?

A non-disclosure agreement (NDA) is a legal contract that prohibits one or more parties from sharing information with third-party people or entities. In an NDA, all signees are consenting to not release the sensitive information stipulated in the contract to the public or to anyone outside the parties involved.

NDAs are often used to protect a company’s confidential information outside of the workplace. They can also ensure employees don’t divulge any sensitive information after they leave the company. Protected information can include:

• Trade secrets

• Proprietary technology

• Business plans, strategies, and tactics

• Personal information of clients or co-workers

• Any information not intended for public consumption

Are NDAs enforceable in India?

For the most part, Indian authorities hold up NDAs as enforceable, governed by the Indian Contract Act of 1872 and decided by courts to be different from certain kinds of outlawed restrictive agreements, so long as they don't restrain an employee from carrying out a separate job in the future.

While not required, NDAs gain credibility if they're certified under India's Registration Act. They also must meet requirements for being reasonable and within the public interest.

To ensure a confidentiality agreement stays legally binding, it should include the full names of the consenting parties, a thorough definition of the information that can’t be disclosed, situations where the NDA is nullified, and reasonable provisions for maintaining confidentiality after an employee is terminated.

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3 things you need to know about NDAs in India

1. There are different types of non-disclosure agreements

In India, there are two types of NDAs you're most likely to encounter:

• Mutual NDAs, also known as two-way or bilateral NDAs, are a type of agreement where all parties in the NDA are contractually bound to share certain information with one another, but no one outside the agreement. Mutual NDAs are often part of mergers, acquisitions, and similar kinds of business deals.

• Non-mutual NDAs, also known as unilateral NDAs, work one way, requiring one party in the agreement to receive sensitive information without leaking or sharing it with anyone else. These types of NDAs are more common in employer-employee relationships and are often signed by a new employee when they are hired.

• Multiparty NDAs, also known as multilateral NDAs, are set up between more than two parties. While these are less common, they allow for one party to disclose information that the other two parties are expected to keep private, eliminating the need to create multiple NDAs.

2. There are essential components to make NDAs enforceable

These are the things that an NDA should include to be comprehensive and enforceable:

• Clear indication of the parties involved. This should include their names and roles, including who will be sharing and receiving confidential information (i.e. the disclosing party and the receiving party) and who they will be sharing such information with.

• Definition of confidential information. This should include the general topic of information covered by the NDA, as well as the scope of information that's covered. It should also define how confidential information is shared; for example, is written information considered confidential but oral information is not?

• Exclusions from confidentiality. If there are any cases when parties in the NDA are allowed to disclose confidential information (for example, after it's been made public), those should be included in the contract.

• Terms of the agreement. How long does the NDA last? For employment NDAs, they typically last for the duration of the working relationship, but they can last longer.

• What will happen if the NDA is breached. It's a good idea to include provisions that outline any injunctions, damages, or other consequences for breaching the NDA, as well as a dispute resolution clause that spells out how the dispute will be resolved.

3. There are legal requirements for trade secrets to be protected under NDAs

In March 2024, the 22nd Law Commission of India released a Trade Secrets and Economic Espionage Report with new recommendations on trade secrets protection. In the Protection of Trade Secrets Bill, 2024, included in the report, it is stated that trade secrets must meet all four of the following criteria to satisfy the courts: 

• Information that is not widely known or accessible 

• Information that has commercial value due to its secrecy 

• Information has been protected through reasonable steps

• Information whose disclosure is likely to cause damage to the holder

When would an employee or contractor sign an NDA?

It's common for employees and contractors in India to sign NDAs during their onboarding or when they start a new work contract. An NDA may also be included as a confidentiality clause in a new hire's offer letter or employment contract.

Frequently asked questions about NDAs in India

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With Rippling's global payroll and hiring software, you can onboard employees and contractors in India in just 90 seconds. ​​Generate NDAs, offer letters, and any other documents you need, then easily send them out for e-signature. With Rippling you can manage HR, IT, and Finance in one unified system—and automate your global compliance work.