Infromal Blog13 October 2026Growthora
Types of NDA
| Type | When to use it | Key point |
|---|---|---|
| Unilateral (one-way) NDA | Only one party discloses, for example a founder pitching to an investor or a company briefing a vendor | Obligations bind the receiving party only |
| Mutual (two-way) NDA | Both parties exchange sensitive information, for example in a joint venture or partnership talk | Each party is both discloser and receiver |
| Employee NDA or confidentiality clause | Employment, internship or consultancy | Protects information, but cannot restrict lawful post-employment work under Section 27 |
| Multilateral NDA | Three or more parties share information in one deal | One agreement covers all, saving repeated paperwork |
Essential clauses of an Indian NDA format
| Clause | What it should say |
|---|---|
| Parties and date | Full legal names, registered addresses, CIN or PAN and the effective date |
| Purpose | The specific reason information is being shared, such as evaluating an investment |
| Definition of confidential information | Clear description covering oral, written, electronic and visual information, marked or reasonably understood as confidential |
| Obligations of the receiving party | Use only for the purpose, keep it secure, limit access to those who need to know and who are bound by confidentiality |
| Exclusions | Information already public, already known, independently developed or lawfully received from a third party, and disclosures required by law |
| Term and survival | Period of the agreement, commonly 2 to 5 years, with trade secrets protected for as long as they stay secret |
| Return or destruction | Duty to return or delete confidential material on request or at the end of the purpose |
| Remedies | Injunctive relief and damages, with a reasonable and non-penal approach to compensation |
| No licence and no obligation to deal | Clarify that sharing information does not grant ownership or force a deal |
| Governing law and dispute resolution | Indian law, courts of a named city and, if preferred, arbitration under the Arbitration and Conciliation Act, 1996 |
| Signatures | Authorised signatories with names, designations, date and witness if used |
Key Takeaways
- India has no separate NDA statute. An NDA is an ordinary contract governed by the Indian Contract Act, 1872, so it needs lawful consideration, free consent and a lawful object.
- Choose a mutual NDA when both sides will share sensitive information, and a one-way NDA when only one side discloses, such as an investor pitch or a vendor onboarding.
- Stamp duty on agreements is a state subject, so the amount and mode of payment depend on the state where the NDA is executed. An unstamped or insufficiently stamped NDA is inadmissible in evidence until duty and penalty are paid.
- Electronic signatures are legally valid under the Information Technology Act, 2000, but they do not replace stamping, so pair e-sign with e-stamping.
- Section 27 makes agreements in restraint of trade void, so an NDA should protect information and not try to stop someone from working in their profession after leaving.
- If personal data is shared, the NDA should also respect the Digital Personal Data Protection Act, 2023 and set out how such data is handled and deleted.
When you need an NDA
- Pitching to investors or sharing a business plan, product roadmap or financial model
- Hiring employees, freelancers or consultants who will see trade secrets or client data
- Onboarding vendors, manufacturers, software developers or agencies
- Discussing a merger, joint venture, licensing or partnership
- Sharing source code, designs, formulas, customer lists or pricing
Stamp duty and execution
- Because stamp duty is levied by each state, the correct duty for an NDA depends on where it is signed. Many states allow e-stamping through authorised agencies, and some require a prescribed amount or a fixed duty for agreements without a specified value. Check the current schedule for your state before executing.
- An unstamped or insufficiently stamped document cannot be used as evidence until the duty and penalty are paid, although this defect can be cured. To avoid delay in a real dispute, stamp the NDA at the time of signing and keep the e-stamp certificate with the signed copy.
Is an NDA enforceable in India
- Yes, a properly drafted and stamped NDA is enforceable as a contract, and courts can grant injunctions to stop disclosure and award damages for breach.
- The definition of confidential information must be reasonably specific, because overly broad or vague terms are harder to enforce.
- Damages are assessed under the Contract Act, which allows reasonable compensation and not a punishing penalty, so draft remedies carefully.
- Clauses that stop an employee from working for others after leaving are generally void under Section 27, but confidentiality and non-solicitation of trade secrets are treated differently from a blanket non-compete.
- Criminal remedies are limited, so the practical protection comes from contract, injunction and, where relevant, the Copyright Act or IT Act.
Practical drafting tips for 2026
- Name the correct legal entity and check it on the MCA master data before signing.
- Share only what is necessary, and share the most sensitive details late in the deal.
- Add a data protection clause if personal data of customers or employees will be exchanged.
- Use a mutual NDA when in doubt, since it is fairer and easier to sign.
- Keep a log of what was shared and when, which helps prove a breach.
- Have a lawyer review the NDA for high value deals, and use this format as a checklist, not as legal advice.
Frequently Asked Questions
Is an NDA legally valid in India?
Yes, an NDA is a contract under the Indian Contract Act, 1872 and is enforceable if it has lawful consideration, free consent and a lawful object, and is properly stamped.
What is the difference between a mutual and a one-way NDA?
A one-way NDA binds only the party receiving information, while a mutual NDA binds both parties because each shares confidential information with the other.
Do I need stamp paper for an NDA in India?
Yes, stamp duty applies as per the state where the NDA is executed, and an unstamped NDA is inadmissible in evidence until the duty and penalty are paid.
Is an e-signed NDA valid?
Yes, electronic signatures are valid under the Information Technology Act, 2000, but you should still pay stamp duty, usually through e-stamping.
How long should an NDA last?
Most business NDAs run for 2 to 5 years, while trade secrets can be protected for as long as they remain confidential if the agreement says so.
Can an NDA stop an employee from joining a competitor?
Generally no, because Section 27 of the Contract Act makes post-employment restraints of trade void, but an NDA can still bar misuse and disclosure of confidential information.
Need a stamped, enforceable NDA for your business?
A badly drafted or unstamped NDA gives a false sense of safety. Book a free consultation with Growthora and we will prepare a tailored NDA, handle e-stamping and e-signing, and review the counterparty before you share anything sensitive.
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