THE LEGAL GREY FIELD OF INFLUENTIAL MARKETING IN INDIA: WHO IS ACCOUNTABLE?

THE LEGAL GREY FIELD OF INFLUENTIAL MARKETING IN INDIA: WHO IS ACCOUNTABLE?,

Nithya Prakash D, PRESIDENCY UNIVERSITY

A single post can sell a dream - or may mislead millions. But when things go wrong, who keeps the blame: brand, stage, or face with one million followers?

INTRODUCTION

India is looking at the golden age of impressive marketing, with an explosion of Instagram reels, YouTube vlogs, and paid brand cooperations. From fashion tips to crypto investment, consumer options in sectors today shape. But growing responsibility with increasing power -

and where the legal grey zone begins. What happens when a beauty causes the skincare product loss recommended by an impressive person? Or when a crypto scheme propagated by a star collapses? Can the affected be held responsible? Are the current laws enough to protect Indian

consumers from misleading online endorsement?1 Let's find out the developed world of impressive accountability in India - and what the law says (or not).

EMERGENCE OF IMPRESSIVE ECONOMY IN INDIA

India's impressive economy has increased rapidly, with more than 100 million materials active in creator platforms. Many of these creators earn attractive income through brand endorsement, affiliate marketing and product reviews. This trend is not limited to urban hubs only -Tier -2 and Tier -3 from cities, and even in rural areas, are now having large scale impacts. Influencers are rapidly replacing traditional advertising formats, thanks to their relativity, authenticity and attached audiences. Unlike traditional advertisements, which are clearly labels and regulated, impressive materials often mix individual storytelling with business interests. The recommendation of a product can look like a casual tip from a friend, making it more inspiring and difficult to regulate 2together. This uninterrupted merger of commerce and personal opinion has created a need for a pressure

for real clarity that forms real support versus misleading promotion.

THE CURRENT LEGAL LANDSCAPE

1. ASCI Guidelines (2021 and 2023 updates)3

They require the affected to clearly disclose the cooperations paid using specific hashtags such as #AD or #Sponsed, especially within a few seconds of a video or the onset of caption. Use of misleading or unclear disclosure - such as tagging or vague language in comments - is clearly prohibited. For example, if an influential person promotes a skincare product with claims of immediate fairness or anti-aging results, they are expected to ensure that such claims are scientifically valid. However, the catch lies in the position of ASCI: it is a self-control body without a

statutory authority. This means that it can issue advice or ask for advertising, but cannot impose a fine or start legal proceedings.

2. Consumer Protection (E-Commerce) Rules, 2020

These rules, however, are mainly important implications for influential people, for the purpose of digital marketplace. Under Section 21 of the Consumer Protection Act, 2019, the endorser - influencers - can be held responsible for misleading advertisements. If an influential person

deliberately or carelessly makes a wrong claim, they can face financial penalty up to ₹ 10 lakh for the first crime and for violation of repeating ₹ 50 million. In addition, influential people are expected to use hard work before making public claims. Promoting products or services with exaggerated or misleading claims such as "guaranteed returns" or "immediate weight loss" can expose them for consumer litigation or regulatory investigation. This structure indicates changes from voluntary morality to implement accountability in digital marketing space.4

CAN THE AFFECTED PEOPLE BE SUED FOR WRONG DONE?

5Yes - The affected people can be sued more accountable under Indian law. The Consumer Protection Act clearly brings endorsers within the scope of liability for false or misleading advertisements. This legal provision ensures that famous celebrities, digital creators and brand ambassadors are not freed from investigation when their supports mislead the public. Legal responsibility arises not only by deliberately false claims, but also from careless promotion without verifying the product or service. Thus, the affected people promoting rejected health products, financial services, or tech gadgets may face legal action if their content causes consumer loss or financial loss.

5 Consumer Protection Act, 2019, Section 21 – "Where any endorser endorses any product or service in a misleading advertisement, the Central Authority may impose a penalty and prohibit such person from making endorsements for a specified period." Read with the Endorsement Guidelines for Celebrities and Influencers, Ministry of Consumer Affairs, June 2022.

CASE STUDIES

Case 1: Ranveer Singh and misleading health advertisement

In 2022, Ranveer Singh was criticized to promote a health supplement, claiming to "build muscles in 10 days". Health experts challenged the scientific validity of product claims, and followed public grievances. The case triggers regulatory action under both ASCI's code and Consumer Protection Act. The advertisement was immediately removed, and Singh's team issued clarifications. This incident suggests that even high-profile celebrities may result in misleading health related publicity.6

Case 2: Crypto Promotion and Impact

During the Crypto Boom between 2021 and 2022, many affrications and celebrities supported the crypto exchanges without offer to reply to risk. When platforms like Vault and FTX collapsed, Indian investors suffered major financial losses. Although no Indian affected has been successfully prosecuted, Baik lash has inspired the SEBI and the Finance Ministry to issue guidelines, discouraging irregular crypto propaganda. This episode underlines potential risks when consumers promote high -risk financial products without proper revelations.7

Case 3: Instagram fake product selling affected

In 2023, many Indian affected people set fire to fire to promote fake luxury items, suspected weight loss tea and unprotected beauty creams. Despite consumer outrage and media exposure, legal action was limited, highlighting the enforcement intervals. These examples show how the

absence of a proper regulatory mechanism allows misleading propagation to weaken consumers.8

BUNDLING LEGAL GRAY ZONE IN IMPRESSIVE MARKETING

India's impressive marketing sector remains largely irregular due to the absence of compulsory licensing systems. Any of the following person can become an influential person without legal obligations to disclose payment promotion. The blurred line between individual materials and

advertisements often results in abandoned revelations, while the regulatory enforcement is weak and consumer prevention mechanisms remain unclear. Social media platforms, also, are lacking continuous enforcement of advertising disclosure rules. To address these intervals, India must introduce a dedicated impressive regulation bill, compulsory for the digital endorsement license. ASCI's voluntary guidelines should be provided with a statutory authority to impose punishment. Platforms such as Instagram and YouTube must be legally necessary to monitor and remove misleading materials. Legal literacy programs for the affected may promote responsible advertisements, while a digital consumer

prevention cell will ensure quick and accessible treatment for consumers. It is necessary to strengthen these areas to ensure accountability, transparency and consumer protection in India's growing digital economy.9

CONCLUSION

Influencers are no longer just entertainment or material manufacturer-they are powerful digital opinion- makers that shape public perception and purchase decisions. When that effect is misused, the loss to consumers is real and often irreversible. If the affected people can earn profits through their voice and access, they should also bear responsibility for the impact of their support. India must go beyond voluntary code and establish a clear, applied legal rule to regulate impressive marketing. The goal is not to stop creativity, but to protect reliability. In a digital-first economy, the trust is the most valuable currency-and misleading effect, in every sense, the theft of that trust.

"In the digital age, there is effect power - and without accountability, power consumer is a threat to confidence."

References 

1 Consumer Protection Act, 2019 (India), Sections 2(28) and 21, and Consumer Protection (E-Commerce) Rules,

2020, which impose liability for misleading advertisements and endorsements

2 ASCI (Advertising Standards Council of India), Guidelines for Influencer Advertising in Digital Media, 2021

& 2023 updates.

3 Advertising Standards Council of India (ASCI), Guidelines for Influencer Advertising in Digital Media, 2021 &

2023. Available at: https://ascionline.in

4 Consumer Protection Act, 2019, Section 21; read with Consumer Protection (E-Commerce) Rules, 2020,

Ministry of Consumer Affairs, Government of India.

6 Advertising Standards Council of India (ASCI), Press Release on Misleading Health Ads, 2022; Consumer

Protection Act, 2019, Section 21

7 Ministry of Finance, Government of India, Advisory on Celebrity Endorsement of Financial Products, 2022;

SEBI Public Statement, Crypto Endorsements and Investor Protection, November 2022.

8 The Economic Times, “Instagram Influencers Under Fire for Promoting Fake Products”, March 2023; Ministry

of Consumer Affairs, Endorsement Guidelines for Celebrities and Influencers, June 2022.

9• advertising Standards Council of India (ASCI), Guidelines for Influencer Advertising in Digital Media, 2021

& 2023. Available at: https://ascionline.in ↩

• Consumer Protection Act, 2019 (Section 21) and Consumer Protection (E-Commerce) Rules, 2020, Ministry

of Consumer Affairs. ↩

• Ministry of Consumer Affairs, Endorsement Guidelines for Celebrities and Influencers, June 2022 –

suggesting mandatory due diligence and disclosure by endorsers.