Hi HRlife,
Non-competitor policy is not all valid in the court of law as it impinges on the right of freedom to employment. Am aware most of the companies in India follow this practice to get the employees to sign this policy but it has many grey areas and company use this to protect their interests which cannot be defended in the court of law.
However please remember, one cannot stop them from joining the competition but one sign the agreement to protect the intellectual propriety rights and ensure that such information on products or clients is protected for a specified period say six months or a year from the end the term of employment with the company.
Regards,
Rajat