Trade Secrets in India: Proposed Law, Business Protection & Compliance

Overview: India is revisiting the need for a dedicated trade secrets law to protect confidential business information, including proprietary know-how and unpatented inventions. While the proposed framework is still under discussion, businesses can currently protect sensitive information through contracts, confidentiality arrangements, internal controls and other legal safeguards.

Valuable information for many businesses is not limited to registered intellectual property. Confidentiality also matters for customer lists, technical know-how, manufacturing processes, source information, pricing strategies and proprietary methods as these can provide a competitive advantage.

India does not currently have a standalone law dedicated exclusively to trade secrets. As the government is revisiting the proposed framework, businesses — particularly startups and technology-driven companies — have reason to review how confidential information is identified, documented, shared and protected.

What Are Trade Secrets?

Trade secrets in general mean commercially valuable information that is not publicly known and is kept confidential by a business. Depending on the nature of the business, this may include technical information, formulas, processes, software-related know-how, business strategies, customer information or other proprietary information.

Unlike patents, trade-secret protection does not depend on registration for a fixed statutory period. Information can remain protected for as long as it continues to meet the relevant requirements of confidentiality and the business takes reasonable steps to protect it.

However, every piece of confidential information automatically doesn’t qualify as a trade secret. Businesses should also take appropriate steps to identify sensitive information, control access and establish clear confidentiality obligations.

Does India Have a Trade Secrets Law?

At present, India does not have a specific statute to exclusively govern trade secrets. Protection is assured through contractual arrangements, confidentiality obligations and judicial principles relating to breach of confidence and misuse of confidential information.

The Indian Contract Act, 1872, provides a legal basis to enforce  contractual obligations, including confidentiality and non-disclosure arrangements. Businesses therefore carefully draft agreements and rely on other safeguards to protect commercially sensitive information.

In the absence of a dedicated statute. There have been continuing discussions about whether India needs a more specific legal framework for trade secrets.

Why Is India Considering a Dedicated Trade Secrets Law?

The government, according to an Economic Times report, has recently revisited the proposed framework and plans consultations with industry and startups. Issues under consideration include whistleblower protection, contract enforcement and the compliance burden on businesses.

The Government is also considering whether contract-related protection should be addressed through a dedicated trade secrets framework or through changes to existing contract law.

The Law Commission of India had also examined the subject in its 2024 report and recommended separate legislation for trade secrets. Its proposed framework also considered exceptions relating to matters such as whistleblower protection, public interest and government use.

The present exercise is therefore part of a wider discussion about creating clearer protection for commercially valuable confidential information. Any final law, however, will depend on the government’s consultation and legislative process.

Available Trade Secret Protection tools

Absence of  a specific law doesn’t mean businesses have no confidentiality safeguards. Some practical solutions include:

• Non-Disclosure Agreements: Non-disclosure agreements and confidentiality clauses are crucial to contracts when sensitive information is shared with employees, consultants, vendors, investors or business partners.
• Employment agreements: Employment agreements should clearly identify confidential information, specify how it may be used and set out appropriate obligations for its return and continued confidentiality.
• Access controls: Access to sensitive technical, financial, customer and strategic information should be limited to employees and other persons who need it for legitimate business purposes.
• IP and ownership documentation: Ownership of software, inventions, technical know-how and other proprietary materials created for or on behalf of the business should be clearly documented.
• Confidentiality records: Businesses should maintain appropriate records showing how sensitive information is identified, shared, stored and protected.
• Internal safeguards: Businesses should have suitable processes for reporting suspected misuse or unauthorised disclosure and for handling confidential information within the organisation.

Trade Secrets and Business Compliance

Trade-secret protection is closely connected with a company’s broader contractual and intellectual property practices.

For startups and growing businesses, informal arrangements can become difficult to manage as employees, consultants, investors, vendors and other business partners gain access to sensitive information. Clearly defining ownership and confidentiality obligations at an early stage helps reduce uncertainty when information is shared between different parties.

Businesses should also distinguish between information that may be protected as a trade secret and intellectual property that may require another form of protection, such as a patent, copyright or trademark.

A documented approach to confidentiality can therefore form part of wider IP and business compliance practices, even while India considers whether a dedicated trade secrets law is necessary.

Need for a Dedicated Trade Secrets Law

A dedicated framework could provide businesses with greater clarity on the definition, protection and enforcement of trade secrets. However, the final scope of any legislation is not yet settled.

The current discussion also highlights the need to balance protection of confidential commercial information with legitimate whistleblower disclosures, public-interest considerations and practical business requirements.

Businesses should therefore avoid assuming that a new registration, filing or compliance requirement will automatically be introduced. Until a law is enacted and the applicable rules are notified, existing contractual and confidentiality safeguards remain important.

SetIndiaBiz Support

For startups and technology-driven businesses handling proprietary software, technical know-how, customer information or other commercially sensitive material, establishing clear contractual and documentation practices early can help create better-defined ownership and confidentiality controls as the business grows.

SetIndiaBiz experts help businesses with the contracts, documentation and compliance arrangements used to structure and protect their commercial interests. Our services also include business agreements, confidentiality and ownership documentation, intellectual-property support, company documentation and other regulatory records relevant to the business.

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India’s reconsideration of a dedicated trade secrets law could eventually provide businesses with a clearer statutory framework for protecting confidential commercial information. For now, businesses should continue relying on appropriate contracts, NDAs, employment arrangements, access controls, ownership documentation and internal safeguards.