A non-compete agreement asks an employee not to join or start a competing business, both during employment and for a set period after they leave. In India, the post-employment part is largely unenforceable under Section 27 of the Indian Contract Act, 1872, so this template pairs the non-compete clause with non-solicitation and confidentiality clauses that courts are far more willing to uphold.

Non-Compete Agreement Template India (with Enforceability Note)

A non-compete agreement asks an employee not to join or start a competing business, both during employment and for a set period after they leave. In India, the post-employment part is largely unenforceable under Section 27 of the Indian Contract Act, 1872, so this template pairs the non-compete clause with non-solicitation and confidentiality clauses that courts are far more willing to uphold.

What a Non-Compete Agreement must include

  • Parties, effective date, and definitions (Confidential Information, Competing Business, Restricted Period)
  • During-employment non-compete and exclusivity clause
  • Post-employment non-compete clause with a clear enforceability caveat
  • Non-solicitation of clients, vendors, and employees
  • Confidentiality and trade-secret protection that survives termination
  • Assignment of intellectual property created during employment
  • Return of company property and data on exit
  • Governing law, jurisdiction, and severability clause
  • Signature blocks for employee and company

Drafting tips

  • Do not rely on the post-employment non-compete to actually stop an ex-employee. Treat it as a deterrent and put your real protection in the non-solicit and confidentiality clauses.
  • Keep the non-solicitation period and scope reasonable, for example 6 to 12 months and limited to clients the employee actually handled. Overbroad clauses are struck down more often.
  • Define Confidential Information clearly and specifically. Vague clauses are harder to enforce when you need an injunction.
  • Have the employee sign this at the offer or joining stage, alongside the appointment letter, so consideration is clear.
  • This is a starting template, not legal advice. Get it reviewed by a lawyer for your industry and state before use.

Non-Compete Agreement format

NON-COMPETE, NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

This Agreement is made on [DD MMM YYYY] between:

[COMPANY NAME], a company incorporated under the Companies Act, having its registered office at [REGISTERED ADDRESS] (the "Company"),

AND

[EMPLOYEE NAME], son/daughter of [PARENT NAME], residing at [EMPLOYEE ADDRESS], Employee ID [EMPLOYEE ID] (the "Employee").

1. DEFINITIONS
1.1 "Confidential Information" means any non-public information of the Company, including client lists, pricing, source code, business plans, financials, and trade secrets, in any form.
1.2 "Competing Business" means any business that offers products or services materially similar to [DESCRIBE COMPANY BUSINESS / PRODUCT LINE] within [GEOGRAPHIC AREA, e.g. India].
1.3 "Restricted Period" means the term of employment plus [NUMBER] months after the last working day.

2. NON-COMPETE DURING EMPLOYMENT
While employed by the Company, the Employee will not, directly or indirectly, engage in, advise, or hold a material interest in any Competing Business, and will devote full working time to the Company. This restriction applies only during the period of employment.

3. POST-EMPLOYMENT NON-COMPETE
3.1 For the Restricted Period after the last working day, the Employee agrees not to join, own, or operate a Competing Business within [GEOGRAPHIC AREA].
3.2 ENFORCEABILITY NOTE: The parties acknowledge that under Section 27 of the Indian Contract Act, 1872, an agreement that restrains a person from exercising a lawful profession, trade, or business is void, except for the sale-of-goodwill exception. Indian courts, including the Supreme Court in Superintendence Company v. Krishan Murgai and Percept D'Mark v. Zaheer Khan, have generally held post-employment non-compete clauses unenforceable. This clause is therefore intended as a good-faith understanding and may not be enforceable in a court of law. The Company relies primarily on Clauses 4, 5, and 6, which stand independently of this clause.

4. NON-SOLICITATION
For [NUMBER] months after the last working day, the Employee will not:
  (a) solicit or attempt to hire any employee of the Company;
  (b) solicit business from any client the Employee served or learned of during employment; or
  (c) induce any vendor or partner to end its relationship with the Company.
Reasonable, narrowly-drawn non-solicitation obligations are more likely to be upheld than a broad non-compete.

5. CONFIDENTIALITY
5.1 The Employee will keep all Confidential Information secret and use it only for Company work.
5.2 This obligation continues indefinitely after employment ends. Protection of trade secrets and confidential information after employment is recognised by Indian courts and is not treated as a restraint of trade under Section 27.
5.3 On exit, the Employee will return or delete all Confidential Information and Company property.

6. INTELLECTUAL PROPERTY
All work product, inventions, and IP created by the Employee in the course of employment belong to the Company. The Employee assigns all such rights to the Company and will sign any document needed to record the assignment.

7. RETURN OF PROPERTY
On the last working day, the Employee will return all Company property, including laptops, access cards, documents, and copies of any data, and will provide written confirmation of deletion of Company data from personal devices.

8. REMEDIES
The Company may seek an injunction and damages for breach of Clauses 4, 5, 6, or 7. The parties agree that money damages alone may not be an adequate remedy for a breach of confidentiality.

9. SEVERABILITY
If any clause is held void or unenforceable, that clause will be severed and the remaining clauses will stay in full effect. Specifically, if Clause 3 is held unenforceable, Clauses 4, 5, and 6 will continue to apply.

10. GOVERNING LAW AND JURISDICTION
This Agreement is governed by the laws of India. The courts at [CITY / JURISDICTION] have exclusive jurisdiction.

IN WITNESS WHEREOF, the parties have signed this Agreement on the date first written above.

For [COMPANY NAME]                          Employee

Signature: ____________________            Signature: ____________________
Name: [AUTHORISED SIGNATORY]                Name: [EMPLOYEE NAME]
Designation: [DESIGNATION]                  Employee ID: [EMPLOYEE ID]
Date: __________                            Date: __________

Witness 1: ____________________            Witness 2: ____________________

FAQs

Are non-compete agreements enforceable in India?

Post-employment non-compete clauses are generally not enforceable. Section 27 of the Indian Contract Act, 1872, voids agreements that restrain a person from a lawful profession or trade, and courts have repeatedly refused to enforce non-competes after an employee leaves. A non-compete that applies only during employment is enforceable.

What can an Indian employer actually enforce instead?

Confidentiality obligations, protection of trade secrets, and reasonably drawn non-solicitation clauses are far more likely to hold up in court. These do not stop a person from working, so they fall outside the Section 27 restraint-of-trade bar.

How long can the restricted period be?

There is no fixed statutory limit, but shorter and narrower is safer. Non-solicitation periods of 6 to 12 months, limited to clients and colleagues the employee dealt with, are more defensible than long, blanket restrictions.

Do I still need a non-compete clause if it may not be enforceable?

Many employers keep it as a deterrent and to signal expectations, while relying on the confidentiality and non-solicitation clauses for real protection. The severability clause ensures the rest of the agreement survives even if the non-compete part is struck down.