Perpetual Confidentiality: Can an NDA Really Last Forever?

Can an NDA really last forever in India?

The Indian Contract Act, 1872 does not set a maximum duration for confidentiality obligations. Parties can agree that information stays confidential indefinitely, and a court will start by reading what was signed.

The limit comes from Section 27 of the Indian Contract Act, 1872, which makes an agreement in restraint of a lawful profession, trade or business void to that extent. Courts have generally treated a genuine confidentiality obligation differently from a non-compete: protecting specific information is not the same as stopping someone from working. A confidentiality clause that is drafted so widely that it effectively stops you from working in your field can start to look like a restraint, and that is where an indefinite term becomes harder to defend.

There is also a simpler logical limit. Confidentiality protects information that is actually confidential. Once information is public, or has become common knowledge in the industry, there is usually nothing left to protect, so a perpetual clause tends to matter less in practice than its wording suggests. The real risk is the long tail of uncertainty it creates for the receiving party.

The practical problem

Confidentiality obligations bind an organisation, not just the person who signed. Five years after a discussion, the people who attended have moved on, the material has been archived or deleted, and there is no reliable way to know which information came from that counterparty and which came from somewhere else.

An indefinite obligation therefore asks for something that cannot really be operationalised. That is worth saying plainly to a counterparty insisting on it, because it is a practical objection rather than a legal quibble, and it usually lands better.

Think of a ten-person design studio in Kochi that signs twenty NDAs a year. After six years it holds 120 open-ended obligations, most to companies it no longer works with, some of which have merged or shut down. Nobody can tell a new hire which ideas are safe to use. A defined term is what lets that studio close the file.

The same applies to individuals. A consultant who signs an NDA with a client in 2026 may still be bound in 2040, by which time she may have worked with a dozen competitors in the same sector. Each new engagement carries a small risk that something she says traces back to that first client. A defined term lets her know when that risk ends, which is a reasonable thing to want from any contract.

Trade secrets are the legitimate exception

There is a real category of information for which indefinite protection makes sense. A formula, a manufacturing process, an unreleased source code base or a genuinely proprietary method retains its value precisely because it stays secret, and a fixed expiry would be arbitrary.

The distinction is between that category and ordinary business information, such as pricing from three years ago or a product roadmap that has since been superseded. Ordinary information loses commercial sensitivity over time, and an obligation that treats both the same is not calibrated to anything.

A useful test: would the disclosing party still be harmed if a competitor learned this in five years? For a spice blend recipe or a credit scoring model, often yes. For last year's discount structure for a distributor in Indore, almost certainly not.

How long should confidentiality last in an NDA?

There is no statutory answer, but market practice in Indian commercial NDAs clusters around the ranges below. Use them as a starting point for negotiation rather than as rules.

The structure that works

The formulation most commonly agreed is a defined term for confidential information generally, commonly two to five years from disclosure or from the end of the relationship, together with a clause providing that information constituting a trade secret remains protected for as long as it retains that character.

That gives a disclosing party genuine protection for what actually needs it, and gives the receiving party an obligation it can manage. It is a standard ask and counterparties recognise it.

Sample wording you can propose: "The obligations in this clause shall continue for three (3) years from the date of each disclosure. Notwithstanding the foregoing, the obligations shall continue in respect of any Confidential Information that constitutes a trade secret for so long as such information remains a trade secret, provided that the Disclosing Party has identified such information as a trade secret in writing at or before the time of disclosure."

The final proviso matters. Without it, the disclosing party can argue years later that almost anything was a trade secret. Requiring written identification at the time keeps the open-ended category small and certain.

The Indian context

India does not have a standalone trade secrets statute. Protection rests on the contract together with established principles concerning breach of confidence, rather than on an Act defining a trade secret and prescribing remedies.

That cuts both ways in this discussion. It is a reason for a disclosing party to want a carefully drafted agreement rather than relying on a statutory baseline. It is equally a reason for a receiving party to resist an obligation drafted so broadly and so indefinitely that it cannot be complied with.

Personal data adds a further layer. The Digital Personal Data Protection Act, 2023 and the DPDP Rules notified in November 2025, which are being phased in, expect personal data to be held only for as long as the purpose requires. An NDA that tells you to keep everything confidential forever, while saying nothing about deletion, sits awkwardly with that approach. Where customer or employee data changes hands, a clause requiring return or deletion at the end of the purpose is the better fit.

What happens if information leaks in year seven?

Suppose a Bengaluru startup signed a perpetual NDA with a supplier in 2019, and in 2026 an ex-employee mentions an old pricing model at a conference. The supplier claims breach.

To recover damages under Section 73 of the Indian Contract Act, 1872, the supplier generally has to show that loss arose naturally from the breach. Seven-year-old pricing that the market has long moved past is unlikely to have caused much provable loss. If the NDA names a fixed sum, say ₹25 lakh, Section 74 of the same Act treats that figure as an upper limit on reasonable compensation rather than an amount automatically payable.

An injunction under the Specific Relief Act, 1963 is also discretionary, and courts are generally unwilling to restrain use of information that is no longer confidential. So the perpetual clause gives the supplier less than it appears to. What it does give is a lever for a dispute, legal costs and management time, which is why it is better avoided than relied on.

What to ask for

• A defined term for confidential information generally, with the clock starting from disclosure or from termination, and a stated end date.
• A trade secret carve-out, expressed by reference to the information retaining that character and identified in writing when disclosed.
• A return or destruction obligation at the end of the term, with a short written certificate, so the obligation has an operational endpoint.
• A right to keep one archival copy for legal and compliance purposes, and copies in routine backups that are not accessed, subject to continuing confidentiality.
• Confirmation that the standard exclusions (public, already known, independently developed, received from a third party) apply throughout, including after termination.
• Mutuality, where both sides are disclosing, so that the same term applies in both directions.

Handling a counterparty that will not move

Large companies sometimes refuse to change their template. If the perpetual clause stays, reduce the exposure on your side: keep a dated register of what you received under that NDA, limit internal circulation to named people, and return or delete the material when the project ends, recording that you did so.

Also check whether the definition of confidential information is narrow. A perpetual obligation over information marked confidential in writing is far easier to live with than a perpetual obligation over all information of any kind, however received. If you can win only one point, the definition is often the more valuable one.