NDA drafting is the preparation of a non-disclosure agreement, a contract in which one or both parties promise to keep specified information confidential and to use it only for an agreed purpose. In India an NDA is enforceable as a contract under the Indian Contract Act, 1872, but its enforceability depends on a clear definition of confidential information, reasonable duration, correct stamping and avoiding clauses the law will not enforce.
What is an NDA and how does Indian law treat it?
A non-disclosure agreement, also called a confidentiality agreement, sets out what information is confidential, who may see it, for what purpose, for how long, and what happens on breach. India has no standalone trade-secret statute. Protection comes mainly from contract law and the equitable duty of confidence recognised by courts, so the quality of the NDA text matters more here than in countries with a dedicated statute.
Under section 10 of the Contract Act, an NDA is valid when made by competent parties with free consent, lawful object and consideration. In a mutual NDA the exchange of promises is the consideration; in a one-way NDA, access to the information or the business discussion usually serves. Damages for breach are governed by section 73, which allows compensation for loss naturally arising from the breach and not for remote or indirect loss. Where the NDA names a sum payable on breach, section 74 permits only reasonable compensation up to that sum.
An NDA is not a magic shield. It cannot protect information that is already public, that the recipient already lawfully knew, or that is independently developed. It cannot stop someone from working in the same industry after the relationship ends, because agreements in restraint of trade are void under section 27 of the Contract Act. It also cannot undo a leak: its value lies in deterring misuse, giving you a basis for an injunction and damages, and setting clear expectations.
NDAs now sit next to data-protection law. If the information includes personal data, the Digital Personal Data Protection Act, 2023 and the DPDP Rules, 2025 impose separate duties. A data fiduciary may engage a processor only under a valid contract, so an NDA by itself is not a substitute for a data processing agreement.
Who needs an NDA?
Use an NDA before you share information whose value depends on staying private.
- Startups pitching to investors, accelerators or potential acquirers
- Businesses sharing pricing, formulae, client lists or process know-how with vendors, manufacturers or distributors
- Software companies engaging freelancers or outsourcing teams who will see source code or product plans
- Employers who want confidentiality obligations for staff, interns and consultants
- Companies in merger, joint venture or partnership talks that involve due diligence
- Professionals such as consultants and agencies who handle client data and need two-way assurance
Benefits of NDA Drafting
Defined confidential information
A precise definition, with examples and written-marking rules, avoids later arguments over whether something was confidential.
Basis for urgent relief
A signed NDA gives you a clear contractual duty to point to when seeking an injunction against misuse, which is often the more valuable remedy than damages.
Controls who sees what
Need-to-know limits, return or destruction duties and rules on sub-contractors reduce uncontrolled circulation.
Supports investor and acquirer diligence
Counterparties expect an NDA before data room access, and a properly stamped one avoids evidentiary problems later.
Sets expectations on data
Where personal data is included, the NDA can include safeguards and breach notice terms that complement your data-protection obligations.
What makes an NDA enforceable in India
Courts look at substance rather than the heading of the document. These points decide whether your NDA will hold.
- Parties must be competent and sign through authorised representatives; for companies, check board authority or a delegated signatory
- The confidential information must be identified or identifiable, with exclusions for public, already known and independently developed information
- The purpose must be lawful and the obligations proportionate; perpetual or unlimited restrictions on ordinary business knowledge invite challenge
- Restraints on trade or employment after the relationship ends are void under section 27, except in limited cases such as sale of goodwill
- The instrument must carry stamp duty under the law of the state of execution to be admissible in evidence
- Disputes should have a governing law, forum or arbitration clause, and a carve-out allowing urgent injunctions from courts
Documents required
Party details
- Legal names, addresses, PAN or incorporation details and email for notices
- Authority documents such as board resolution or authorisation letter for the signatory
- Role of each party: disclosing, receiving, or both
Deal information
- The purpose for which information is shared, such as investment evaluation, vendor trial or joint development
- Description of the information, such as source code, financial data, client lists or specifications
- Intended duration of disclosure and how long confidentiality should last afterwards
Supporting information
- Any existing master agreement, term sheet or employment contract the NDA must fit with
- Whether personal data will be shared, and if so what categories
- Preferred state for stamping and signing method
How we draft your NDA
NDAs look simple, but the details of scope and exclusions decide whether they work.
Understand the deal
We ask who discloses, what is disclosed, why and for how long. A mutual NDA is not always right; one-way is cleaner where only one side shares.
Choose the structure
We select a one-way, mutual, employee or multi-party form and decide whether to add return-or-destroy, audit and sub-contractor controls.
Draft the clauses
We draft the definition of confidential information, exclusions, permitted use, standard of care, compelled disclosure, term, remedies, governing law and dispute resolution.
Check for non-enforceable riders
We review any non-compete or non-solicit proposals against section 27 and suggest enforceable alternatives such as confidentiality and limited non-solicitation.
Review and adjust
You review the draft with plain-language notes. We incorporate comments, including those from the other party, and keep a version record.
Stamping
We assess the duty under the state schedule and arrange e-stamp paper, for example through SHCIL in Delhi and Uttar Pradesh or the e-GRAS portal in Haryana.
Signing and record keeping
Parties sign by wet ink or electronic signature. We recommend a disclosure log so you can prove what was shared and when.
Stamp duty and other government costs
There is no government filing fee for an NDA. The only statutory cost is stamp duty, which is a state subject. Many states charge a fixed amount on a general agreement, but the amount and the article differ by state, so we confirm the current figure when preparing your e-stamp.
| Item | Amount | Note |
|---|---|---|
| Stamp duty on NDA | As per state stamp schedule | Varies by state; Delhi, Uttar Pradesh and Haryana each set their own. Confirmed before e-stamping. |
| E-stamp service charge | As charged by the agency | Collected by the stamping agency or bank at issue. |
| Notarisation | As charged by the notary | Not legally required for an NDA; sometimes requested by a counterparty. |
Professional charges are quoted separately after reviewing your case. Government fees are paid directly to the authority.
How long does it take?
A standard NDA can be ready within a few working days of complete instructions. Time depends on how many parties must review and whether the counterparty proposes changes. We do not promise a fixed turnaround before seeing the deal.
| Stage | Typical time |
|---|---|
| Instructions and structure | Same day to 1 working day |
| First draft | 1 to 3 working days |
| Negotiation | Depends on the counterparty |
| E-stamping and signing | Often same day |
Term and survival of confidentiality
An NDA has a disclosure period, during which information is shared, and a confidentiality period, during which the recipient must keep it secret. A common structure is a short disclosure period with confidentiality continuing for a fixed number of years after termination. Indefinite protection is reasonable only for true trade secrets, which should be listed and kept under real controls. Generic business information is better protected for a fixed period. Under the Limitation Act, 1963, a claim for breach must be brought within the limitation period, so act promptly when you learn of a leak. On stamping, the Supreme Court's seven-judge bench ruled on 13 December 2023 that an unstamped agreement is not void but cannot be admitted in evidence until duty and penalty are paid.
After signing the NDA
- Keep a disclosure log noting date, what was shared and with whom
- Mark documents and files as confidential, as the NDA may require
- Restrict access to named people and require them to be bound by confidentiality
- Diarise the end of the disclosure period and request return or destruction of materials
- Retain the signed, stamped copy and the e-stamp verification record
- Review and update the NDA when you also share personal data, so a separate data processing agreement is in place where needed
One-way NDA vs mutual NDA
| Point | One-way NDA | Mutual NDA |
|---|---|---|
| Who is bound | Only the receiving party | Both parties |
| Suited to | Investor pitch, vendor trial, one-sided sharing | Joint ventures, partnerships, M&A talks |
| Drafting complexity | Simpler; fewer exclusions | Balanced obligations, more negotiation |
| Negotiation | Receiving party often asks to make it mutual | Usually quicker to accept as it is fair |
| Risk | Over-broad terms can be rejected | You are also bound by the same duties |
Common NDA mistakes
Definition that covers everything
Treating all information as confidential makes the NDA harder to enforce and can be read against the party who drafted it. Define categories and add exclusions.
Perpetual non-compete
Post-termination non-compete clauses are void under section 27. Adding them can distract from enforceable confidentiality terms and invite challenge to the document.
Unstamped NDA
A plain-paper NDA is hard to rely on in court because it is inadmissible until duty and penalty are paid.
No remedy clause
Silence on injunctive relief, notice of breach and return of material leaves you negotiating after the damage is done. Include a clear remedies clause but avoid an inflated penalty sum, which section 74 will cut back.
Signing with the wrong entity
Using the brand name rather than the company's legal name, or a person without authority, can make enforcement against the right party difficult.
Forgetting personal data
An NDA does not satisfy the contract requirement for data processors under the DPDP Act, 2023. If personal data is involved, a separate processing agreement is needed.
Legal consequences of breach and defects
An NDA does not carry statutory penalties by itself, but a breach can lead to damages, injunction and, in some cases, claims under other laws such as copyright or the Information Technology Act, 2000. Courts award damages only for loss naturally arising from the breach under section 73, so proving actual loss matters. If the NDA names a liquidated sum, section 74 allows only reasonable compensation up to that sum. Separately, an NDA that is unstamped is inadmissible until the duty and the penalty set by state law are paid.
| Default | Consequence | Provision |
|---|---|---|
| Breach of confidentiality obligations | Damages for loss naturally arising; injunction at the court's discretion | Section 73, Indian Contract Act, 1872 |
| Named sum payable on breach | Reasonable compensation up to the named sum | Section 74, Indian Contract Act, 1872 |
| Post-termination non-compete | Void to the extent of the restraint | Section 27, Indian Contract Act, 1872 |
| Unstamped NDA | Inadmissible until duty and state-prescribed penalty are paid | Section 35, Indian Stamp Act, 1899 (as applicable in the state) |
Practitioner tips
- Share in stages. Give high-level information first and the sensitive material only after the counterparty has shown serious intent. No NDA is as protective as not disclosing something unnecessarily.
- Put real trade secrets, such as formulae and source code, in a named schedule with stricter handling rules. Courts respond better to specific controls than to generic wording.
- Add a clause allowing disclosure under law or court order, with prior notice where permitted. Without it, a recipient may be in breach even when legally compelled.
- Align the NDA with employment and consultancy contracts. An employee NDA that conflicts with the appointment letter creates confusion about which clause governs.
- For overseas counterparties, choose the governing law and seat deliberately. Enforcing an Indian judgment abroad, or the reverse, is slower and costlier than agreeing an arbitration seat up front.
How Lawgical Guru helps
Tailored drafting
We draft one-way, mutual, employee and vendor NDAs to match your actual deal, with defined information, exclusions and survival terms.
Enforceability check
We review non-compete and non-solicit requests against section 27 and recommend enforceable alternatives.
Stamping and e-signing
We assess state duty, arrange e-stamp paper and guide electronic signing so the NDA is usable as evidence.
Links with your other documents
We align NDAs with employment agreements, commercial contracts and your trademark registration strategy.
What we do not do
We do not conduct litigation or file injunction suits, and an NDA cannot guarantee that information will never leak. We will tell you plainly what the document can and cannot achieve.
NDA Drafting: frequently asked questions
Is an NDA legally enforceable in India?
Yes, as a contract under the Indian Contract Act, 1872, provided it has lawful object, consideration, competent parties and reasonable terms. Courts can award damages under section 73 and grant injunctions. Clauses restraining a person from working or trading after the relationship ends are void under section 27.
What is the difference between a one-way and a mutual NDA?
A one-way NDA binds only the party receiving information, which suits an investor pitch or vendor trial. A mutual NDA binds both parties and suits joint ventures or deal talks where each shares sensitive material. Choose based on who will actually disclose, not on convenience.
How long should an NDA last?
There is no statutory duration. Commonly, confidentiality continues for a fixed number of years after the relationship ends, while true trade secrets may be protected for as long as they remain secret. Excessively long or vague periods for ordinary information are harder to enforce and may be challenged as unreasonable.
Does an NDA need stamp duty?
Yes. Stamp duty is payable under the law of the state where the NDA is executed. An unstamped NDA is not void, as the Supreme Court's seven-judge bench held on 13 December 2023, but it cannot be admitted in evidence until duty and penalty are paid, so stamp at signing.
Can an NDA include a non-compete clause?
A non-compete during the relationship is generally acceptable, but a post-termination non-compete is void under section 27 of the Contract Act. Courts do enforce confidentiality, IP protection and reasonable non-solicitation of staff or clients. Draft those instead of an unenforceable ban on working in the industry.
Can an NDA be signed electronically?
Yes. Electronic signatures such as Aadhaar eSign and digital signature certificates are valid under the Information Technology Act, 2000, and contracts formed electronically are enforceable. You still need an e-stamp certificate for the state of execution to be attached before signing.
What information is not protected by an NDA?
Information that is public, already known to the recipient, independently developed, or received lawfully from a third party is normally excluded. Disclosure required by law or a court order is also usually carved out. A good NDA states these exclusions clearly rather than leaving them to argument.
What can I do if someone breaches an NDA?
Collect evidence of the disclosure, send a notice, and consider seeking an injunction and damages through the forum agreed in the NDA, which may be a court or arbitration. Damages need proof of loss. We help organise documents, but court proceedings must be handled by a litigating advocate.
Do employees need to sign an NDA?
It is good practice. Confidentiality terms can be in the appointment letter or a separate NDA, and they survive the end of employment if drafted for it. Non-compete restrictions after exit are not enforceable under section 27, so rely on confidentiality, IP assignment and non-solicitation.
Does an NDA cover personal data under the DPDP Act?
Not fully. The Digital Personal Data Protection Act, 2023 and the DPDP Rules, 2025 impose separate duties on data fiduciaries and require a valid contract with data processors. If you share personal data, add data-protection terms or sign a separate processing agreement alongside the NDA.
Reviewed by Satyam Gupta, Company Secretary (CS) & Advocate
8+ years of industry experience. This page was last reviewed on 16 October 2026 against the official sources below. Rules and fees change — confirm on the official portal before you apply.