Written By: Apoorv Agarwal, Aastha Arora, Suvangana Agarwal, Deepika Sethia
Introduction: The Changing Landscape of Digital Endorsements
The last decade has fundamentally transformed how brands communicate with consumers in India. Traditional celebrity endorsements, historically limited to film actors, cricketers, and public figures, have been supplanted by a broad spectrum of digital content creators: lifestyle vloggers, beauty reviewers, food bloggers, travel influencers, “finfluencers,” health coaches, gamers, and micro-influencers with highly engaged niche audiences. Their opinions are regarded with a level of trust and intimacy that conventional advertising cannot replicate. This closeness is precisely what renders influencer advertising both potent and legally delicate.
The rapid expansion of influencer marketing has raised significant regulatory concerns: undisclosed commercial relationships, exaggerated claims, affiliate promotions presented as personal advice, endorsements of unregulated financial products, and health recommendations lacking scientific validation. Influencers now influence not merely trends but also purchasing decisions, investment behaviours, and perceptions of safety and efficacy. As consumer dependence on influencers intensifies, so does the necessity for a clear legal framework to regulate their conduct.
India currently maintains a dual regulatory system. On one side is the Advertising Standards Council of India (ASCI),[1]a self-regulatory body whose guidelines promote ethical clarity and transparency. Conversely, the Central Consumer Protection Authority (CCPA) [2]functions as a statutory regulator, empowered under the Consumer Protection Act, 2019, to impose penalties, ban endorsements, and prosecute for misleading advertisements. Although these frameworks intersect, they serve distinct roles: ASCI formulates responsible advertising standards, while the CCPA ensures legal compliance and enforces penalties for violations.
ASCI and the Foundations of Responsible Digital Advertising
A. The Rationale Behind ASCI Guidelines
The ASCI Guidelines for Influencer Advertising in Digital Media (2021)[3] were introduced in response to widespread concerns that audiences often cannot distinguish between genuine personal opinions and paid promotions. For decades, ASCI has overseen ethical advertising practices in India. Still, the influencer ecosystem created unique challenges: short-form content, visually immersive formats, native advertising embedded in casual storytelling, and the pervasive use of affiliate discount codes.
ASCI recognised that consumers tend to trust influencer content because it appears spontaneous and unscripted. This trust can be undermined if commercial content is not properly disclosed. Therefore, the guidelines attempt to restore clarity by ensuring that audiences are not misled into believing that a paid endorsement is an organic personal recommendation.
B. Mandatory Disclosure Requirements
The most critical obligation under ASCI is the mandatory disclosure of any “material connection” between the influencer and the advertiser. A material connection includes:
- Monetary compensation
- Free products or services
- Discounts, gifts, or barter arrangements
- Affiliate partnerships (where the influencer earns commission from purchases)
- Travel or hospitality sponsored by the brand
- Equity or profit-sharing relationships
ASCI mandates that such relationships be disclosed clearly, prominently, and upfront using identifiers such as #ad, #sponsored, #paidpartnership, #collaboration, etc. On video platforms, disclosures must remain on screen long enough for consumers to notice; in audio formats, they must be stated at the beginning; and on image-driven platforms, disclosures must not be hidden below the “more” section.
A disclosure buried in a cluster of hashtags or in ambiguous phrasing, such as “thanks to XYZ for sending this,” is insufficient. The underlying principle is uncompromising transparency.
C. Prohibition on Misleading or Unsubstantiated Claims
ASCI also imposes obligations regarding the substance of the endorsement. Influencers are prohibited from making unverified or exaggerated claims. This requirement is particularly pertinent in sectors such as:
- Skincare and dermatology
- Fitness, weight-loss, and supplements
- Crypto products and fintech
- Medical devices
- Health foods and nutraceuticals
ASCI’s annual reports indicate that over 70% of influencer content flagged in 2022–2023 contained unsubstantiated or exaggerated claims. For instance, videos asserting “instant results,” “100% safe,” “guaranteed profit,” or “miracle cure” breach ASCI’s Code unless they are supported by scientific validation.
D. The Marico v. Bhansali Precedent
The legal significance of ASCI’s guidelines was judiciallyrecognised in Marico Ltd. v. Abhijeet Bhansali[4] (2019). In this case, a YouTuber criticised Parachute coconut oil, suggesting it was not “100% pure,” based on questionable tests conducted in his video. The Bombay High Court held:
- Digital creators wield substantial influence and cannot disseminate misleading information.
- Even content framed as opinion must not be reckless or based on unreliable evidence.
Although the case involved negative statements rather than endorsements, it cemented a legal principle: influencers are accountable for the accuracy of claims they publicise, whether promotional or critical.
Statutory Enforcement Under the Consumer Protection Act, 2019
While ASCI offers ethical guidance, the Consumer Protection Act, 2019, establishes binding legal obligations enforceable through penalties and prohibitions. The Act introduced, for the first time, a statutory mechanism to regulate misleading advertisements and impose liability on endorsers.
A. CCPA’s Statutory Powers Under Section 21
The Central Consumer Protection Authority has the power to:
- Initiate suo motu inquiries into misleading advertisements
- Order discontinuation or modification of such advertisements
- Impose penalties up to ₹10 lakh for the first offence and ₹50 lakh thereafter
- Prohibit endorsers from promoting products for up to one year (extendable to three years)
- Order a recall of dangerous or defective products
Crucially, these powers apply not only to manufacturers and advertisers but also to endorsers, including influencers.
B. Guidelines for Prevention of Misleading Advertisements (2022)
In 2022, the CCPA issued detailed guidelines expressly addressing influencer promotions. The guidelines mandate:
- Prominent disclosure of material connections
- Diligence obligations—influencers must verify the truthfulness of claims
- Restrictions on health, medical, and financial claims
- Prohibition on surrogate advertisements, especially where direct advertising is illegal (e.g., tobacco, liquor, gambling)
- Heightened safeguards for ads targeting children
The guidelines cast influencers not merely as entertainers but as individuals whose communication has legal consequences.
C. The Standard of “Reasonable Due Diligence”
The CCPA imposes a duediligence obligation on endorsers: they must possess or rely on adequate evidence supporting the claims they communicate. This requirement echoes the Supreme Court’s reasoning in Common Cause v. Union of India (2018),in which the Court warned that endorsers must not promote products without verifying their accuracy, particularly when health or safety implications are involved.
For influencers, this means:
- They cannot rely solely on brand-provided scripts if claims appear exaggerated.
- They must insist on scientific reports, test data, or certification where assertions involve health, efficacy, or safety.
- They must avoid broad guarantees like “clinically proven,” “zero side effects,” or “assured returns” unless such claims are demonstrably true.
D. Enforcement Trends and Notices Issued to Influencers
In 2023–2024, the CCPA issued formal notices to multiple influencers promoting:
- Unregulated financial and crypto products
- High-risk trading platforms
- Nutritional supplements
- Drastic weight-loss formulations
- Real estate schemes promising unrealistic returns
These enforcement actions illustrate a clear regulatory shift: influencers and brands must treat online endorsements with the same seriousness as television or print advertising.
Misleading Advertisements: Scope of Liability and Judicial Interpretation
A. What Constitutes a Misleading Advertisement?
The Consumer Protection Act broadly defines misleading advertisements. They include representations that:
- Are factually untrue
- Create unjustified expectations
- Deliberately omit material facts
- Confuse consumers about risks or benefits
- Hide commercial intent under the guise of personal opinion
In influencer advertising, this includes scenarios where:
- Affiliate products are promoted without disclosure
- Skincare products claim guaranteed effects without evidence
- Financial apps are advertised as “safe” or “risk-free”
- Nutritional supplements are promoted using pseudo-scientific language
- B. Judicial Approach in Advertising Cases
Although India does not have a specific Supreme Court decision oninfluencers’ liability, established precedent on misleading advertisements provides substantial guidance. In Horlicks Ltd. v. Zydus Wellness Products Ltd. (Delhi High Court, 2020), the Court highlighted that advertising claims must be truthful and substantiated. Similarly, in PepsiCo v. Hindustan Coca-Cola (2003), the Delhi High Court emphasised that exaggeration becomes unacceptable when it leads to consumer misinformation.
The National Consumer Disputes Redressal Commission (NCDRC), through various rulings, has asserted that even minor misleading elements can significantly deceive consumers, particularly in the context of health-related products.
These principles are equally applicable to content created by influencers.
Allocation of Responsibility: Brands, Influencers, and Platforms
A. Shared Liability Between Brands and Influencers
Both ASCI and the CCPA regard influencers as accountable endorsers rather than merely passive amplifiers. The legal stance is unequivocal:
- Influencers are liable for the content they publish
- Brands are liable for what they induce influencers to publish
- Agencies facilitating such endorsements may also face scrutiny for non-compliant campaigns
This shared liability has reshaped influencer contracts. Most brand collaborations now incorporate:
- Mandatory ASCI-compliant disclosures
- Verification obligations for claims
- Indemnity clauses for breach
- Requirements for storing evidence of disclosures
- Warranties regarding lawful endorsements
B. Intermediary Liability: Protection Under Shreya Singhal
Platforms such as YouTube, Instagram, and Facebook generally enjoy safe harbour protections under Section 79 of the IT Act. In Shreya Singhal v. Union of India (2015), the Supreme Court clarified that intermediaries are shielded unless they activelyparticipate in publishing unlawful content.
Therefore, platforms are rarely directly liable for misleading influencer advertisements unless:
- They knowingly promote the content
- They ignore court or government orders to remove it
- They algorithmically amplify illegal advertisements despite notice
Emerging Risks in Influencer Advertising
A. Finfluencers and Unregulated Investment Advice
The most concerning aspect of influencer marketing at present is the group of financial influencers who advocate:
- Futures and options trading
- Crypto-assets
- High-leverage platforms
- Unregulated investment schemes
Numerous individuals currently dispense investment advice without possessing SEBI registration, while others promote high-risk applications under the pretence of “educational content.” In 2023, the Securities and Exchange Board of India (SEBI) issued public cautions, and the Consumer Complaint Redressal Authority (CCPA) commenced scrutinising such endorsements. Given the financial implications, enforcement activities in this sector are expected to escalate.
B. Health and Wellness Claims
Wellness influencers often endorse supplements, powders, teas, oils, and “detox regimes” lacking adequate scientific support. Products asserting miraculous outcomes, such as achieving glowing skin within seven days, guaranteed fat reduction, or “miracle immunity boosters”, are categorically considered misleading and are therefore prohibited.
Regulators scrutinise such claims keenly, given their potential impact on consumer health and the risk of physical harm.
C. Children and Vulnerable Audiences
ASCI explicitly prohibits any conduct that manipulates children’s credulity. The CCPA’s guidelines further reinforce this, imposing enhanced responsibilities when advertisements are targeted at minors. Influencers producing child-facing content, particularly in areas such as gaming, snacks, toys, fashion, or study aids, must exercise additional caution.
Practical Compliance Measures for Influencers and Brands
From a legal risk management perspective, influencers ought to maintain a structured compliance framework approach:
- Use explicit disclosures in all paid or gifted collaborations.
- Verify all product claims, especially those related to health and finance.
- Retain brand communication that verifies claims or provides scientific evidence.
- Reject misleading or unverifiable campaigns, even if lucrative.
- Avoid endorsements of unregulated financial products unless legal qualifications permit.
- Exercise heightened caution in promoting products aimed at children.
- Maintain digital records of disclosures and collaboration terms for future regulatory inquiries.
Brands must implement equally robust compliance processes to ensure that campaign briefs, scripts, and creative assets do not contain misleading assertions.
Conclusion: Towards a Transparent and Trustworthy Digital Marketplace
India’s regulatory landscape has matured rapidly to address the complexities of influencer advertising. ASCI’s ethical guidelines establish the baseline of transparency and fairness, while the CCPA’s statutory powers enforce discipline where ethical breaches cross into consumer harm. This dual framework reflects a broader regulatory philosophy: influencer advertising is a legitimate commercial activity, but one that must operate within clear, transparent, and legally enforceable boundaries.
As influencer marketing continues to dominate digital commerce, compliance is no longer optional; it is foundational to credibility. Influencers who fail to disclose commercial relationships or who endorse products without verifying claims risk statutory penalties, reputational damage, and growing judicial scrutiny. Conversely, those who embrace transparency strengthen long-term trust with audiences and contribute to a healthier digital environment.
The evolution of India’s influencer-advertising regulations signals a simple, unequivocal message: influence carries responsibility. With that responsibility comes the obligation to uphold accuracy, honesty, and respect for the consumer. As the digital marketplace expands, a transparent and accountable influencer ecosystem will not only protect consumers but also reinforce the integrity and sustainability of India’s digital economy.
[1]https://www.ascionline.in/
[2]https://doca.gov.in/ccpa/
[3]https://www.ascionline.in/wp-content/uploads/2022/09/press-release-influencer-guidelines-2021.pdf
[4]https://nluassam.ac.in/docs/Journals/IPR/vol1-issue-2/12.pdf
