How to Draft an NDA in India: A Corporate Lawyer's Practical Guide

The Non-Disclosure Agreement is the first contract most founders sign. It is also the contract most often signed badly. The reason is simple: NDAs feel like a formality, so people skim them. Six months later, when the recipient uses the information in a way nobody anticipated, there is no clean remedy in the document.

This guide is the version of the conversation I have with clients before they send out their first NDA. It is not exhaustive, your situation may need clauses I do not cover here, but it captures the points that matter most under Indian law, and the mistakes I see most often.

When do you actually need an NDA

Not every conversation needs an NDA. The standard you want is this: you are about to share information that is genuinely non-public and that you would not be comfortable seeing on a competitor's whiteboard.

That standard catches the situations that matter. Investor due-diligence calls where you are sharing financials or customer data. Vendor negotiations where you are showing pricing or roadmap. Senior hire conversations where you are revealing strategy. Acquisition discussions, by definition. Joint ventures.

It does not catch most early-stage investor pitches. The kind of pitch that gets sent across the table at a coffee meeting does not need an NDA. Asking a VC to sign one before a first meeting marks you as inexperienced, and most will refuse. Save your NDA for the moment when the diligence actually starts.

Mutual or one-way

A mutual NDA binds both sides. A one-way NDA binds one side, the recipient of confidential information. Pick on the facts.

Use a one-way NDA when only one party will share confidential information. A vendor pitching to you, a candidate who has nothing comparable to share. Use a mutual NDA when both sides will share, which is the case in most commercial negotiations, joint ventures, acquisition discussions and senior-hire conversations where the candidate may share their own non-public ideas or work product.

The default for most B2B situations should be mutual. It is what counterparties expect, it lowers the friction of negotiation, and it covers you in case the discussion ends up flowing both ways.

The eight clauses that matter most

1. The definition of Confidential Information

This is the most important clause in the document, and the one most often written badly. Avoid the temptation to define Confidential Information as "all information shared". Courts have repeatedly held that overly broad confidentiality definitions are difficult to enforce. If everything is confidential, nothing is.

A good definition does three things. It captures information of any form (oral, written, electronic) that is non-public. It requires that the information either be marked as confidential or be of a nature that a reasonable person would understand to be confidential. And it carves out the usual exceptions: information that is already public, was independently developed, was lawfully known to the receiver before disclosure, or is rightfully received from a third party.

2. The Purpose

The recipient should be allowed to use the Confidential Information only for a specific, defined Purpose. For example, "evaluating a potential commercial partnership between the parties". Without a Purpose clause, you have effectively given a one-way licence to use the information for anything, as long as it stays confidential.

3. Standard of care

The recipient should be required to protect your information with at least the same standard of care it applies to its own confidential information, and in any event with reasonable care. Make this clause non-negotiable.

4. Term and survival

How long does the NDA last, and how long do the confidentiality obligations survive termination? These are two different things. A typical structure: the NDA runs until terminated on notice, but confidentiality obligations survive for a fixed period (commonly two or three years) after termination, with an indefinite survival period for trade secrets.

5. Compelled disclosure

If the recipient is legally compelled to disclose your information, by court order, by a regulator, by law, they should be required, where lawful, to give you prompt prior notice so you can seek a protective order, and to disclose only the minimum amount required.

6. Return or destruction

On termination or written request, the recipient should return or destroy all your Confidential Information, including copies, and certify the destruction in writing. Build in a carve-out for archived or backup copies held automatically by IT systems, but require that those copies remain confidential until they expire.

7. Remedies

NDAs are usually difficult to enforce in monetary terms. Proving the damage caused by a breach of confidentiality is hard, and the value is often diffuse. The standard remedy is injunctive relief. Your NDA should acknowledge that breach may cause irreparable harm for which damages are inadequate, and that the disclosing party is entitled to seek injunctive relief in addition to all other remedies.

8. Governing law and forum

Pick a governing law and a forum, and be deliberate about it. For domestic Indian deals, the laws of India and exclusive jurisdiction of the courts in a specified city (typically Delhi, Mumbai or Bengaluru). For cross-border deals, often English law with arbitration in Singapore or London. Whatever you pick, do not leave it blank or default to "the laws of the disclosing party's jurisdiction". That is a recipe for a fight before any substantive dispute can even begin.

Two India-specific things to know

Section 27 of the Indian Contract Act

Section 27 of the Indian Contract Act, 1872 makes agreements in restraint of trade void, with a narrow exception for the sale of goodwill. This affects two clauses that often appear in NDAs: non-compete and non-solicitation.

A non-compete that restrains the recipient from operating in a particular line of business after the NDA ends is generally not enforceable in India. Indian courts have repeatedly held that post-termination non-compete clauses are restraints of trade. Non-solicitation clauses, restraining the recipient from soliciting your employees or clients, are on better ground if narrowly drafted, but still face scrutiny.

The practical implication: do not over-rely on these clauses in an Indian-law NDA. If protecting your competitive position is critical, do it through a tight Purpose clause, a tight Confidential Information definition, and a serious remedies clause, not through a non-compete that may not survive litigation.

Stamping

An NDA in India should be properly stamped to be admissible in evidence in Indian courts. The stamp duty depends on the State in which the agreement is executed and varies meaningfully. An unstamped NDA is not automatically void, but it cannot be relied on as evidence until the duty (plus penalty) is paid. For any NDA you actually care about, stamp it.

Three mistakes I see again and again

"All information shared" definitions

Already covered above. Tighten your definition or risk losing it on enforceability grounds.

No Purpose clause

Without a Purpose clause, the recipient can use your Confidential Information for anything, as long as they keep it confidential. This is almost never what you intend. Always include a Purpose.

No independent-development carve-out

The standard exclusions should include information independently developed by the recipient without reference to your Confidential Information. Without this carve-out, you risk picking a fight every time the recipient releases a product that happens to look similar to what you discussed.

The bottom line

A good NDA is short, specific, and built around the realistic remedies you can actually obtain. Most NDAs I review are too long, too vague, and rely on clauses that Indian courts would not enforce. The fix is not more pages. It is sharper drafting around the few clauses that matter.