Business Contracts
White Label Agreement India: Key Clauses, IP Rights & Legal Guide
White labeling is booming in India — from SaaS platforms to FMCG products, pharma, fintech, and healthcare. But most white label deals are built on poorly drafted contracts that leave both parties exposed. IP ownership gaps, exclusivity ambiguity, and missing product liability clauses are the most common — and most costly — mistakes.
White Label vs OEM vs Private Label: Key Differences
- White label: Standard product manufactured by Provider A, sold to multiple resellers who each brand it as their own. No customization. Provider serves many resellers simultaneously.
- OEM (Original Equipment Manufacturer): Custom product designed to the Buyer's specific requirements, manufactured by Provider, sold by Buyer under Buyer's brand. Typically exclusive and involves significant Buyer IP in the specification.
- Private label: Manufacturer produces a product exclusively for one retailer who brands it. Common in food, retail, pharma. Functionally similar to OEM but less technical customization.
10 Critical Clauses for White Label Agreements in India
1. IP Ownership Clause
The most important clause. Default position: provider retains all IP (patents, copyrights, trade secrets, formulations). Reseller gets only a license to brand and sell. State: (a) who owns base IP, (b) who owns custom modifications, (c) what happens to IP on termination. Ambiguity here leads to court battles.
2. Brand License and Usage Restrictions
Reseller gets a limited, non-exclusive (or exclusive, if agreed) license to brand the product. Provider cannot use the reseller's brand. Include: approved marketing materials, brand guidelines compliance, no sub-licensing, and rights revert immediately on termination.
3. Exclusivity Clause (If Applicable)
WITHOUT an explicit exclusivity clause, the provider is free to supply the same product to all competitors. If you need exclusivity, define it precisely: by territory (India only), by industry (EdTech only), or by customer segment. Tie exclusivity to minimum purchase obligations — otherwise you've given exclusivity for nothing.
4. Quality Standards and Testing
Specify: quality standards (BIS, FSSAI, ISO certification for products; SOC2, ISO 27001 for software), acceptance testing process, defect rate thresholds, and resolution timelines. Provider must maintain quality certificates throughout the agreement.
5. Product Liability Indemnity
Under the Consumer Protection Act 2019, the entity selling under a brand is the "manufacturer" for liability purposes. The reseller can be sued for defective products they didn't design. Include: provider indemnifies reseller for product defects arising from provider's manufacturing process. Both parties should maintain product liability insurance.
6. Regulatory Compliance
Who is responsible for regulatory approvals? FSSAI license for food products, drug license for pharma, BIS certification for electronics, SEBI registration for financial products — define which party obtains and maintains each license, and what happens if a license is revoked.
7. Pricing and Minimum Order Quantity
Define: price per unit (or per software license), minimum order quantity or minimum commitment, price revision mechanism (CPI-linked, annual review), and payment terms. For SaaS white label: price per tenant, per seat, or per usage tier.
8. Non-Disclosure and Trade Secrets
Provider discloses formulations, source code, processes — all must be treated as confidential. Reseller discloses customer list, marketing strategy — also confidential. Mutual NDA embedded in the white label agreement is more enforceable than a separate standalone NDA.
9. Data Ownership (For SaaS White Label)
Critical for software: who owns the customer data? The reseller's customers' data belongs to the reseller (and their customers). The platform provider cannot use, analyze, or monetize this data. Include clear data portability rights: reseller can export all data on termination.
10. Termination and Transition
Define termination triggers and notice periods (typically 90 days). On termination: (a) reseller returns/destroys all provider IP, (b) provider assists in transition for X days, (c) outstanding orders are fulfilled, (d) unsellable inventory is dealt with (buy-back or write-off). Transition support is missing from 90% of white label agreements.
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Analyze Your Contract Free →Frequently Asked Questions
Who owns the IP in a white label agreement?
By default, the white label provider retains all IP rights. The reseller gets only a license to sell under their brand. Any customizations must be explicitly addressed in the contract to determine joint or licensed IP ownership.
Can a white label reseller be sued for product defects in India?
Yes. Under the Consumer Protection Act 2019, a company that brands, packages, and sells a product is treated as a manufacturer for consumer complaints. White label resellers need product liability indemnity from their providers and appropriate insurance.
Can a white label provider sell to competitors?
Without an exclusivity clause, yes — the provider is free to supply competitors. Resellers must negotiate explicit exclusivity (by territory, industry, or customer segment) tied to minimum purchase obligations.
Related reads: SaaS Agreement Guide India · Distribution Agreement Guide · IP Assignment Agreement Guide