INTRODUCTION
India’s innovation ecosystem is nearing a point of absolute change. While the country has made significant advances in strengthening its intellectual property (IP) regime, especially regarding patents, trademarks, and copyrights, one important component is missing: a dedicated trade secrets statute. With the economy increasingly relying on data, technology, and innovation, the absence of comprehensive trade secret legislation creates a significant gap in India’s ability to support high-value innovation and attract investment[1]. Trade secrets, which are confidential business information that provides a competitive advantage, add significant value across industries ranging from pharmaceuticals and biotechnology to software and digital services[2].
RECOGNIZING THE VALUE OF TRADE SECRETS
Trade secrets are one of the components of the intellectual property landscape, equally valid as patents, trademarks, and copyrights[3]. Trade secrets protect confidential business information, such as formulas, manufacturing processes, algorithms, and customer lists that have economic value, from being secret[4]. Concepts of trade secrets do not require a registration process like patents. Trade secrets can theoretically provide perpetual protection as long as secrecy is maintained[5].
All over the world, trade secrets have become a predominant tool for protecting innovation in the new digital economy, where ideas develop and change at a faster pace than patents can keep up. Ubaydullaeva (2024), in her study of digital shaping of the business context, articulates that digital shaping has advanced the need for trade secret protections for proprietary knowledge, algorithms, and data enrichment[6].
CURRENT LEGAL LANDSCAPE FOR INDIA: A PATCHWORK OF PROTECTION
India does not have a specific law protecting trade secrets. What it has is a patchwork of common law principles, and they are based primarily on contract law, equity, and tort[7].
The most frequently employed method for businesses to restrict the dissemination of information is the use of confidentiality clauses in either employment contracts or collaboration contracts[8]. Courts have treated breaches of confidence and unauthorised disclosure of privileged information as actionable wrongs, but enforcement is only recognised on a limited and unpredictable basis[9].
For Instance:
- The Indian Contract Act of 1872 recognises the enforcement of confidentiality agreements[10].
- The Information Technology Act of 2000 offers limited protection against unauthorised access to information[11].
Courts have, from time to time, even applied equity in order to restrain the misuse of confidential information[12]. However, the lack of a statutory definition of a “trade secret” and the lack of statutory remedies for misappropriation leave businesses vulnerable.
INDIA MUST ENACT TRADE SECRETS LEGISLATION
Attracting High-Technology Investment: Both investors and multinational businesses desire predictable legal environments. India would benefit from an explicit and enforceable legislation framework on trade secrets that would promote investment by being on par with considerable investment environments, such as the United States, the European Union, and Singapore[13]. Studies show that stronger trade secret protections lead to valuation enhancement of the firm and increased investor confidence in the firm[14]. For example, Castellaneta, Kacperczyk, and Conti (2016)[15]
Encouraging Domestic Innovation: In transition economies, an effective IP regime is central to incentivising innovation[16]. Abdin et al. (2023) provide evidence that intellectual property protection, including trade secrets, plays a key role in risky incremental innovation, which reduces the challenges of imitation of the firm[17]. In the context of India, where a large proportion of start-ups and MSMEs are not well-resourced and, therefore, unable to seek patent protection for their innovations, trade secret legislation would democratise and incentivise the innovation cycle within the firm by providing inexpensive, flexible, and universal protection processes[18].
Creating a Connection Between Academia and Industry: A trade secret legislative framework would also improve collaborative research and open innovation, both of which are becoming increasingly important within India’s knowledge economy[19]. A study conducted by Manzini and Lazzarotti (2015) highlights that formalised IP protection allows for better management of collaboration in the development of products. With protection from unauthorised use of new findings, universities and companies could collaborate in R&D[20], funding and technologies for applying new knowledge and ultimately accelerating the commercialisation of research[21].
LEARNING FROM MODELS IN THE GLOBAL LANDSCAPE
US MODEL: Consistency, Enforcement: In the United States, the Defend Trade Secrets Act (2016) provides one of the most extensive trade secret regimes alongside the state law protection of the Uniform Trade Secrets Act (UTSA)[22]. Among other things, this act specifies civil remedies for misappropriation, criminal penalties for theft, and whistleblower protections. While the document also defines different aspects of what is a “trade secret” and how to determine misappropriation, it reduces confusion[23].
THE EU: BALANCING ACCESS AND SECRECY
An illustrative model is the EU Trade Secrets Directive (2016/943), which harmonises trade secret protection across the member states, emphasising fairness and public interest[24]. In this regard, noted that balancing fair knowledge utilisation and trade secrets could continue to be addressed, for example, through the EU’s ongoing innovation on the balance between trade secret protection and access to data in the digital economy, as seen in the EU Data Act (2024)[25].
EMERGING TECHNOLOGIES: BLOCKCHAIN FOR IP PROTECTION
With the emergence of blockchain and Internet of Things (IoT) technologies, there are new solutions to the demands of trade secret protection, describing a blockchain-based architecture that supports the development of immutable, traceable records of IP assets[26], including trade secrets, to protect sensitive data and limit access[27]. India can use its emerging digital infrastructure to offer such technologies for verifying proof of ownership and controlling access to confidential information[28].
DIFFICULTIES IN PUTTING TOGETHER A TRADE SECRETS LAW
Although it is clear that the case for legislation is strong, effective codification of trade secrets law involves confronting several policy and practical challenges:
Definitions: The law must clearly define “trade secret” without being overly restrictive; otherwise, the case law might lead to inconsistent and often contradictory enforcement[29].
Balancing Employer and Employee Rights: Overprotection may engender impediments to employee mobility and knowledge diffusion. This can be seen in the U.S. in the form of “inevitable disclosure” cases[30].
Interaction with Data Protection and Competition Law: The new Digital Personal Data Protection Act (2023) and competition law framework enacted in India must co-exist with the trade secrets law, preventing the two laws from conflicting with one another[31].
Enforcement Mechanisms: In order to facilitate effective remedial action, Civil remedies, criminal penalties, and an IP bench with domain-specific expertise might be merged[32].
Awareness and Compliance: SMEs and start-ups would have to learn best practices for compliance, documentation and other necessary courses of action in order to ensure that the secrecy of their intellectual capital is maintained[33].
POTENTIAL ECONOMIC AND INNOVATION EFFECTS
A strongly designed trade secrets law could help facilitate India’s move to a knowledge economy by:
Lessening the Burden of Litigation: Statutory clarity can lessen reliance on long contractual disputes[34].
Encouraging Foreign Direct Investment (FDI): Predictable intellectual property (IPs) protection is one of the determinants of FDI for technology-related sectors[35].
Encouraging Local Innovation: A law will benefit local startups, able to rely on statutory protections over robust and expensive patents[36].
Reducing the Risk to Collaborate: Universities and industries can share information by statute with a clear understanding of confidentiality[37].
Support Data and Digital Growth: Legal protection can help protect proprietary algorithms and data processors, thereby assisting India’s digital economy[38].
One study (Benkler, 2017) noted that “excessively rigid property rights will undermine collaborative innovation networks[39].” Thus, India’s trade secrets law should protect with some openness, in order where both market and non-market innovation can flourish[40].
FRAMEWORK FOR INDIA’S TRADE SECRETS LAW
Taking inspiration from international best practices, the future law on trade secrets protection should ideally include:
Broad Definition: This should encompass technical, commercial, and digital information having economic value in secrecy[41].
Civil and Criminal Remedies: This should refer to injunctions, damages, and seizure of materials wrongfully obtained[42].
Whistleblowing/Public Interest Exception: This should ensure the law is not used as a means of silencing disclosures of wrongful conduct[43].
Compatibility with Digital Evidence Regimes: Acknowledging electronic records and blockchain-based evidence[44].
Dedicated IP Bench: For efficient and speedy adjudication of trade secrets disputes, there can be an IP bench as part of a broader IP process[45].
This umbrella provides clarity, predictability, and deterrence, all essential components of effective IP governance[46].
CONCLUSION
In the absence of a tailored statute, the current state of trade secret protection in India remains disjointed, unassured, reactive, and too limited in scope[47]. A comprehensive trade secrets law could fill an important hole in India’s IP framework that has the potential to create a conducive setting for innovation, collaboration, and investment[48]. By developing knowledge and experience from international best practices and developing laws that take into account new components of emerging technologies, India could forge a modern, appropriate, and progressive trade secrets approach that embraces its ambition to be a global innovation hub[49]. Ultimately, it is not just an enumerated statute that is required; rather, it is an imperative for innovation[50].
Author’s Name: Abhinav Manchanda (UILS, Chandigarh University, Mohali)
[1] UNCTAD, World Intellectual Property Report 2024 (UNCTAD 2024).
[2] WIPO, ‘Trade Secrets’ https://www.wipo.int/tradesecrets/en/ accessed 26 October 2025.
[3] Robert G. Bone, Intellectual Property Law (3rd edn, Foundation Press 2021) 132.
[4] Ibid 135.
[5] Ibid 136.
[6] M Ubaydullaeva, ‘Digital Shaping and Proprietary Knowledge Protection’ (2024) Journal of Business Law 45.
[7] Rajiv Gupta, ‘Trade Secret Protection in India: A Legal Perspective’ (2020) 12 Indian Journal of Intellectual Property Law 22.
[8] Ibid 24.
[9] Ibid 25.
[10] Indian Contract Act 1872, s 10.
[11] Information Technology Act 2000, ss 43 and 66.
[12] Saltman Engineering Co v Campbell Engineering Co (1948) 65 RPC 203 (CA).
[13] WIPO, ‘Comparative Overview of Trade Secret Laws’ https://www.wipo.int/tradesecrets/en/ accessed 26 October 2025.
[14] Castellaneta F, Kacperczyk A, and Conti R, ‘How Firms Protect Innovation: The Role of Trade Secrets and Patents’ (2016) 58 Strategic Management Journal 1475.
[15] Ibid 1482.
[16] Abdin M et al, ‘Trade Secrets and Incremental Innovation in Transition Economies’ (2023) World Intellectual Property Review 34.
[17] Ibid 36.
[18] Ibid 37.
[19] Manzini R and Lazzarotti V, ‘Managing Open Innovation Partnerships’ (2015) R&D Management Journal 23.
[20] Ibid 25.
[21] Ibid.
[22] Defend Trade Secrets Act 2016 (US).
[23] Ibid s 1836(b).
[24] EU Trade Secrets Directive 2016/943, art 2.
[25]European Commission, ‘EU Data Act 2024’ https://digital-strategy.ec.europa.eu/en/policies/data-act accessed 26 October 2025.
[26] S Gatteschi et al, ‘Blockchain Technology for Trade Secret Protection’ (2020) 18 Future Internet 3.
[27] Ibid 5.
[28] Ibid 7.
[29] WIPO (n 2).
[30] Ibid.
[31] Digital Personal Data Protection Act 2023, s 18.
[32] Ibid ss 34–36.
[33] Rajiv Gupta (n 7) 29.
[34] Castellaneta, Kacperczyk and Conti (n 14) 1483.
[35] UNCTAD, World Investment Report 2024 (n 1) 67.
[36] Abdin M et al (n 16) 38.
[37] Manzini and Lazzarotti (n 19) 26.
[38] Gatteschi et al (n 26) 6.
[39] Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom (Yale University Press 2017) 142.
[40] Ibid 145.
[41] EU Trade Secrets Directive 2016/943, art 2(1).
[42] Ibid arts 5–6.
[43] Ibid art 1(4).
[44] Gatteschi et al (n 26) 7.
[45] Rajiv Gupta (n 7) 31.
[46] Bone (n 3) 138.
[47] Ibid.
[48] UNCTAD (n 1) 68.
[49] WIPO (n 2).
[50] Benkler (n 39) 148.
