Influencer Marketing & Disclosure Laws: Regulatory Bodiesin India

Abstract

The expansion of influencer marketing in India has transformed digital advertising into personalised digital content, carried out by people with the power, position, platform, knowledge, and credibility to shape opinion in the market. These people are called influencers. Companies hire them to promote products to an audience, and the stronger their connection and charisma, the more people they influence.

This has led to concerns about transparency, misleading advertisements, and consumer protection. The line between content and advertisement continues to blur as the market digitalises and adopts new advertising tactics in place of traditional ones.

This paper examines the regulatory framework governing influencer marketing in India, along with the relevant statutory framework. It analyses judicial precedents on dishonest or misleading advertisement, while also examining the gap between the developments made and the limitations of the legal provisions currently in place.

Keywords: Influencer Marketing, Guidelines, Disclosure, Laws, Advertisement, Self-Regulatory, Statutory.

Introduction

A market has the power to influence people. As traditional brand advertising has evolved over time, companies have realised the power of influencers in this age, with the rise of social media apps acting as a further catalyst. More than half the population uses social apps like YouTube, Instagram, and Facebook, and these platforms now shape public opinion. As social media influencers have multiplied, a new marketing tool has emerged alongside them.

These influencers typically have a stable platform, credibility within their community, standing, and the knowledge to shape opinion easily. Celebrities are the clearest example: they carry all these factors, along with the charm and charisma needed to influence an audience. Under ASCI, however, there is a separate category for “influencers” distinct from “celebrities,” even though the same legal obligations apply to both when endorsing a product.

The line between personal and commercial content is separated by a thin thread, which is becoming increasingly difficult to distinguish. This raises concerns about a lack of transparency and consumer protection, while also raising questions of unfair trade practices and misleading advertisement.

This issue is addressed by the Advertising Standards Council of India (ASCI) — a voluntary, self-regulatory, non-profit organisation established in 1985 — alongside the statutory framework under the Consumer Protection Act, 2019. Together, these aim to guard consumers’ rights while establishing healthy, fair competition. ASCI is responsible for framing guidelines and regulations for advertising in the Indian market, and this paper examines them and critically assesses whether they are sufficient to regulate the market.

Background

In 2024, Influencer Marketing Hub reported that global influencer marketing would cross $24 billion by 2025, with India standing out as one of the fastest-growing markets due to its large digital population. OTT players like Netflix, Amazon Prime, and Disney+ Hotstar are incorporating influencers into their marketing campaigns, and advertising agencies are building influencer elements into their broader marketing plans.

An influencer is someone who has access to an audience and the power to affect that audience’s purchasing decisions or opinions about a product, service, brand, or experience, by virtue of the influencer’s authority, knowledge, position, or relationship with their audience.

Brand advertising is a strategy to build brand recognition and establish long-term credibility with consumers. It requires building a brand identity — a concept customers can associate with the brand — that distinguishes it from similar products in the market. The more customers a company makes aware of its brand, the more loyalty it can expect throughout the buying journey.

Advertisement is vital to the working of an economy: it promotes competition and guides consumer choice, and is a legitimate means for sellers to generate interest in their products. The aim should be truthfulness and honesty in showing the product. The moment misrepresentation, misleading advertising, dishonesty, or other harmful practices enter the picture, consumer rights are put at risk and violated.

The Advertising Standards Council of India (ASCI) is a voluntary, self-regulatory, non-profit company established in 1985. It is committed to protecting consumers’ interests, hearing consumer grievances, and setting rules for online content that are enforced within the law. This works alongside the Consumer Protection Act, 2019, which imposes penalties for misleading advertisements and non-disclosure. Together, they aim to build a market that is safe for consumers, ensuring transparency, honesty, and fairness — and to distinguish ordinary content from content that has been “paid to appeal.”

ASCI has established The Code for Self-Regulation of Advertising Content in India, which sets rules for standard advertisement across categories such as self-regulation generally, specific categories (automobiles, food and beverages, educational institutions, etc.), and skin-lightening and fairness advertisements.

Legal Analysis

The legal framework governing the digital economy is built to control the advertising market, not to harm it — this is the bare minimum expected while advertising, and effort should be made to keep the work honest and fair, avoiding any abuse of trust or exploitation of consumers with less market knowledge.

Advertising Standards Council of India (ASCI)

As discussed above, ASCI was established in 1985 to protect consumers by keeping advertisements within its Code for Self-Regulation, which requires advertisements to be legal, decent, honest, and truthful, and neither harmful nor promotive of unfair competition. The Code sets out important guidelines on disclosure, market connections, and digital marketing.

Disclosure is the act of making previously private or unknown information known to the public. ASCI requires this while promoting products online: if a product has been paid for review, this must be disclosed within the content itself. Concealing such information is considered harmful, since it might otherwise have affected the public’s view of the product. The disclosure must be understandable to an average viewer, stated clearly throughout the content, and made visible in the description as well.

Ingredient disclosure covers the ingredients used in a product’s manufacturing. Under ASCI, excessive or exaggerated claims are prohibited, as is any false claim about an ingredient, since these directly harm consumers. A clear, properly labelled, easy-to-understand disclosure should appear on the packaging to avoid negligence. For example, under the Food Safety and Standards Authority of India (FSSAI), alongside ASCI, ingredient disclosure is mandatory and must be printed on product packaging — chips, chocolate, drinks, and the like — in a manner that is visible and understandable to the average consumer.

Due diligence and honesty must be maintained throughout a product’s advertisement. Steps such as reviewing the content and testing consumer satisfaction should be taken to substantiate any claim made in the course of advertising. Poorly made content can lead to misrepresentation, or even harm to the consumer.

ASCI also prohibits offensive advertisements — those that make offensive remarks about a person’s gender, race, caste, colour, or religion — since this type of advertisement harms not just an individual, but the wider public. Advertising for skin-lightening or fairness, and advertising built on harmful gender stereotypes, are recurring examples. ASCI flagged the well-known cream brand “Fair & Lovely” for perpetuating racial and skin-colour stereotypes, including disregarding and portraying people with darker skin as inferior. The brand was later renamed “Glow & Lovely,” dropping the word “fair” altogether, and its advertising — which had previously shown people moving from a darker to a lighter skin tone — was rebranded accordingly.

Product placement, or embedded marketing, is a technique where a product is placed within movies, TV shows, or games. This too falls within the legal sphere: product placement should be used with clear intent, and disclosed at the start and end of the relevant scene, and during promotional work, to make the affiliation and connection clear.

Consumer Protection Act, 2019

The Act provides a legal and statutory framework against misleading advertisements, and supplies important definitions — including “advertisement,” “consumer,” “endorsement,” and “misleading advertisement.”

Under Section 21, the Act empowers the Central Consumer Protection Authority to investigate and take legal action against false or misleading advertisements. This includes discontinuing or modifying the advertisement, along with penalties on the manufacturer, endorsers, and service providers.

Section 2(28) defines a “misleading advertisement” as one that:

(i) falsely describes such product or service; or (ii) gives a false guarantee to, or is likely to mislead, consumers as to the nature, substance, quantity, or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer, seller, or service provider, would constitute an unfair trade practice; or (iv) deliberately conceals important information.

A strong legal framework has been established to cover the digital evolution and protect consumers, applying not just to commercial content but to personalised content published online. A major concern, however, remains: enforcement. Despite ASCI and the Consumer Protection Act addressing the problem, regulation remains largely surface-level and has yet to catch up with the pace of digital content’s evolution.

Case Law Discussion

Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd., SC (1995)

The Supreme Court of India highlighted the importance of advertisement to the economic system, recognising commercial speech under Article 19(1)(a) of the Constitution and holding that it may only be restricted on grounds of deception, public interest, or unlawful speech.

The Court further recognised advertisement as the lifeblood of free media, responsible for making media widely available, citing the newspaper industry’s reliance on advertising revenue. This strengthened the Court’s point that without advertising, resources available for “news” would decline, eroding its quality and quantity, while raising its cost to the public and restricting its “democratic” availability.

Horlicks Ltd. & Anr. v. Zydus Wellness Products Ltd. (2020)

The High Court held that rival contentions are permitted and protected under commercial speech, and that comparative advertisement is allowed as long as it does not mislead or disparage consumers. However, the Court found that Zydus’s television commercial did disparage Horlicks, since its claims were made without a voice-over or a proper disclaimer — a few seconds on screen were not enough for consumers to read it. The Court also weighed the medium of advertisement: electronic media, which has a far greater impact than traditional print.

PepsiCo, Inc. & Ors. v. Hindustan Coca-Cola Ltd. & Anr. (2003)

This matter arose when Pepsi found that a “Thumbs Up” advertisement targeted it directly. Close resemblance to, or portrayal of, a rival’s goods in a negative or false light is prohibited, and here the commercial dismissed Pepsi as a “kids’ drink” — inferior and unsuitable for adults.

The Court emphasised the line between permissible comparative advertising and disparagement: comparative advertisements are permitted so long as they do not create a false or misleading impression, or discredit a rival’s product. The manner of the advertisement matters — a mocking or ridiculing comparison invites scrutiny — but comparison itself is allowed, provided it stops short of being degrading or targeting a rival outright.

Critical Analysis

The existence of regulatory and statutory provisions like ASCI and the Consumer Protection Act, 2019 is a good foundation, but one that still lacks proper enforcement and has real limitations.

The ASCI framework lacks legal enforceability. Its sole focus on self-compliance reduces its credibility: ASCI cannot impose punishment and has no provision to do so — its role is limited to issuing directions and recommendations, leaving the final decision with companies and advertisers. This makes it structurally weak in enforcement, and its published guidelines remain vague, still failing to define many forms of false or misleading advertisement.

The Consumer Protection Act, 2019 rests on a stronger foundation across markets and advertisement types, and does provide for punishment, giving it more credibility than ASCI on enforceability. It is, however, still not well adapted to the pace of the digital market, and it is oriented more towards punishing violations after the fact than towards a single, clear standard that would stop violations from happening in the first place. That said, punishment of this kind still functions as a deterrent — giving the Act some preventive effect, even though it acts after a violation rather than before one.

The priority should be to strengthen the existing framework, since the foundation is already strong: what is needed is clearer, stricter, and more binding enforcement to protect a healthy, transparent, fair market and its consumers. Striking that balance will not be simple, but a solid foundation in ASCI and the Consumer Protection Act, 2019 makes it more achievable. As digitisation continues to evolve, the law will need to keep pace, continuing to act as a shield for consumers.

Conclusion

A proper, standard advertisement rests on honesty, transparency, and ethical and legal responsibility rather than foul play. As commercial dynamics continue to evolve and expand, the legal framework must keep adapting in step with the present and future, with consumer rights and healthy competition as the goal. The current statutory and regulatory provisions are a foundation and a proof of progress, with stronger enforcement and protection still to come.

India has shown it can hold its own against the pace of technological and digital change. The influencer market is still relatively new and emerging, and while the first mile has been covered, much more lies ahead. The focus going forward should remain on building safeguards for healthy competition — and, above all, protecting consumers.

Reference(S):

1. India Const. Art. 19, cl. (1)(a). (Jun. 8, 2026, 11:39 PM)
2. The Consumer Protection Act, 2019, § 2(28) and § 21. (Jun. 8, 2026, 9:45 PM)
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