The Rise of Influencer Marketing in India: Navigating the Evolving Legal Landscape

Introduction

Popularity of influencer marketing has exploded in recent years, with brands increasingly partnering with social media personalities to promote their products and services. In India, the influencer marketing industry was valued at ₹55 Billion in the year 2024, a whopping 20 % increase over the previous year. The market is further expected to expand at a compound annual growth rate (CAGR) of 25% until 2026, with its value further estimated to amount to over ₹107 Billion by 2027.

The issue, however, is that this rapidly growing industry remains largely unregulated to this date, creating potential risks and challenges for the influencers, brands, and the intermediaries facilitating such partnerships.

The blurring lines between authentic content and paid promotions, the lack of standard agreements, and the varying levels of professionalism among players have led to a landscape ripe for confusion, conflicts, and potential legal issues. As the industry matures and attracts more scrutiny from regulators and consumers alike, it is becoming increasingly important for all stakeholders to understand the legal nuances of influencer marketing and adopt best practices to mitigate potential risks.

Current Legal Framework

Currently, the primary guidelines governing influencer marketing in India are the rules put forth by the Advertising Standards Council of India (ASCI). ASCI’s “Guidelines for Influencer Advertising in Digital Media” aim to bring transparency and accountability to influencer marketing practices. However, since ASCI is a self-regulatory body and not a statutory authority, compliance with its guidelines is voluntary and not mandatory.

This lack of binding regulation, combined with the informal way in which many influencer marketing deals are arranged (often over email or messaging apps without detailed contracts), leaves much scope for misinterpretation, disputes, and potential legal exposure for everyone involved.

Key Points from ASCI’s Influencer Advertising Guidelines

1. Disclosure: All promotional content posted by influencers must carry a clear, upfront disclosure label identifying it as an advertisement. Labels like “Ad”, “Sponsored”, “Collaboration”, “Partnership” etc. should be used. The disclosure should be prominent, unambiguous, and in the same language as the ad content itself.
2. Material Connection: Disclosure is required if there is any material connection between the advertiser and influencer that could affect the credibility of the endorsement. This includes monetary compensation, free products, gifts, discounts, trips or any other perks, whether asked for or not. The obligation to disclose exists regardless of whether the influencer’s opinion is unbiased or not.
3. Placement and Duration: Disclosures should be hard to miss. They should not be hidden in hashtags, bios, or visible only by clicking “more”. For videos, disclosure labels should be superimposed and held for a specified duration based on video length (a minimum of 3 seconds for videos under 15 seconds). For live streams, disclosure should be announced verbally at the start and end, and included in the text if the stream is visible afterwards.
4. Virtual Influencers: Virtual or computer-generated influencers must disclose that the viewers are not interacting with a real human being. This disclosure must be upfront and prominent.
5. Advertiser and Influencer Responsibility: Both advertisers and influencers are responsible for ensuring that the ad content and disclosures adhere to ASCI’s code. The advertiser must have evidence of the material connection and also brief the influencer on disclosure requirements. Both parties should be able to substantiate claims made in the ad.
6. Due Diligence: Influencers are advised to do their due diligence and satisfy themselves that advertised products or services are genuine and claims are substantiated.
7. Qualifications for Health and Financial Advice: Influencers providing advice related to health, nutrition, finance, or insurance must have relevant qualifications and certifications (such as medical degrees, SEBI registration, IRDAI license etc.), which should be disclosed prominently in their content.

 

The Role of Intermediaries: Marketing Companies, PR Firms, and Talent Managers

In the complex ecosystem of influencer marketing, there are often multiple intermediaries who play a crucial role in connecting brands with influencers and managing these partnerships. These include marketing agencies that specialize in influencer campaigns, public relations firms that handle influencer outreach for their clients, and talent managers or agencies that represent influencers.

• Marketing and PR Agencies: Many brands, especially larger ones, often outsource their influencer marketing campaigns to specialized agencies. These agencies are tasked with identifying suitable influencers, negotiating deals, managing the creative process, and handling the execution and reporting of the campaign. From a legal perspective, agencies have a responsibility to ensure that the campaigns they run are compliant with advertising regulations and guidelines. This includes briefing influencers on required disclosures, reviewing content for any problematic claims, and ensuring that the necessary contracts and paperwork are in place. However, in practice, the level of legal involvement and oversight provided by agencies can vary greatly. Some may have robust processes and in-house legal teams, while others may operate in a more informal manner. This can lead to potential compliance gaps and risks for the brands they represent.

• Talent Managers: On the influencer side, many successful creators are represented by talent managers or agencies. These intermediaries handle brand deals, negotiate contracts, provide creative direction, and generally manage the business side of an influencer’s career. From a legal standpoint, talent managers have a fiduciary duty to act in the best interests of their clients. This includes negotiating favourable deal terms, protecting their intellectual property rights, ensuring proper disclosures, and vetting brand partners for any potential reputational risks. However, the influencer management space is still relatively unregulated, and the level of professionalism and legal expertise can vary greatly among players. Some managers may prioritize getting quick deals over long-term strategic planning, while others may not have the necessary legal knowledge to properly advise their clients.

 

Implications and Best Practices

The involvement of intermediaries adds another layer of complexity to the already intricate web of influencer marketing partnerships. On one hand, agencies and managers can bring valuable expertise, resources, and scale to the table. On the other hand, they can also introduce additional risks and potential points of failure from a legal and compliance perspective.

To mitigate these risks, it is crucial for all parties – brands, influencers, and intermediaries – to prioritize transparency, due diligence, and proper documentation in their dealings. This includes:

• Clearly defining roles, responsibilities, and expectations in the contract
• Conducting thorough background checks and reference checks on partners
• Having robust processes for content review and approval
• Ensuring proper disclosures and adherence to guidelines
• Maintaining open lines of communication and escalation channels
• Regularly auditing campaigns for compliance
• Investing in legal training and support for team members

Brands should carefully vet the agencies they work with and ensure that they have the necessary expertise and processes in place to run compliant campaigns. Agencies’ capabilities and track record in executing campaigns that adhere to legal and regulatory requirements should be a key consideration in the selection process.

On the influencer side, influencers should exercise diligence when choosing their representation. It is crucial that their management team is well-versed in contractual terms and obligations to protect the influencer’s interests. In case the management lacks this expertise, influencers should seek guidance from legal practitioners who can provide the necessary contractual and legal support. This will help safeguard influencers from potential issues that may arise from poorly structured or mismanaged contracts and partnerships.

Agencies and managers, in turn, have an opportunity to differentiate themselves by building strong legal capabilities and positioning themselves as trusted partners who can navigate the complex influencer marketing landscape effectively. By developing in-house legal expertise or forging strategic partnerships with legal professionals, agencies and management firms can offer value-added services to their clients. This proactive approach not only helps protect the interests of both brands and influencers but also enhances the agency or management firm’s credibility and competitiveness in the market.

Ultimately, by prioritizing legal compliance and seeking appropriate expertise, all parties involved in influencer marketing – brands, influencers, agencies, and managers – can work together to create more transparent, compliant, and successful collaborations while minimizing potential risks and conflicts.

Challenges in the Current Influencer Marketing Landscape

• Lack of Formal Agreements: One of the biggest issues in the current influencer marketing space is the lack of formal, written agreements between parties. Often, the terms of the partnership are loosely defined over email or messaging apps, without a detailed contract that spells out crucial aspects such as deliverables, content ownership, usage rights, exclusivity, termination conditions, payment terms, dispute resolution mechanisms and so on. This informality breeds ambiguity and mismatched expectations, leading to potential conflicts down the line. Without a clear, legally binding agreement, all parties are exposed to uncertainties and have little recourse if things go wrong.

• Lack of Legal Awareness Among Influencers: Many influencers, especially those who are new to the field or do it part-time, are not fully aware of their legal rights and responsibilities when it comes to brand partnerships. They may not understand the nuances of disclosures, the implications of the claims they make, or their liability if something goes wrong. In their eagerness to secure deals and build their portfolio, some influencers may agree to unfavorable terms or take on more than they can deliver. Without proper guidance, they may inadvertently put themselves in compromising positions legally and professionally.

• Risks for Companies: The lack of a robust legal framework poses significant risks for companies working with influencers too. Without a formal contract, brands have little control over how their products or messaging are portrayed by the influencer. If the influencer goes off-script, communicates unapproved claims, or gets embroiled in a controversy, the brand’s reputation could suffer with little legal recourse. In some cases, brands may even be held liable for an influencer’s problematic content if proper disclosures are not in place or if the content is found to be misleading or harmful. This exposure is particularly concerning in regulated industries like health, finance, and kids’ products.

 

Implications for Stakeholders

The maturing of the influencer marketing industry in India has significant implications for all players involved. Influencers across audience sizes or niches, need to start approaching their work with a more professional mindset. This means investing time in understanding their rights and responsibilities, being selective about brand partnerships, negotiating fair contracts, maintaining high ethical standards, and building a trusted personal brand.

Brands need to view influencer partnerships as a serious marketing strategy that requires careful planning, due diligence, and investment in proper legal frameworks. Choosing the right influencers, crafting detailed briefs, setting clear expectations, and having tight contracts in place are essential to maximize ROI and minimize legal and reputational risks.

Agencies and managers have an opportunity to set themselves apart by building strong legal capabilities and processes. By positioning themselves as trusted partners who can effectively navigate the complex influencer landscape, they can provide more value to their clients.

Engaging experienced legal partners who understand the nuances of influencer marketing can be a game-changer for all stakeholders. From drafting customized contracts to advising on regulatory compliance to handling disputes, a skilled legal team can provide the support and expertise needed to thrive in this dynamic industry.

Increased Legal Scrutiny

We have already seen some traction in this area, such as the 2022 Guidelines by the Ministry of Consumer Affairs on misleading advertisements and endorsements, which put greater onus on endorsers to do their own due diligence. As per recent news, the Department of Consumer Affairs has also been working on a framework to regulate online reviews and endorsements. In this context, it is advisable for all players to proactively adopt transparent and ethical practices in line with ASCI’s guidelines and other relevant laws. Being ahead of the curve in terms of disclosures, substantiation of claims, and professional contracting will help avoid regulatory trouble down the line.

The Supreme Court has also recently interfered in this area. In an order passed in Writ Petition(Criminal) No. 83/2025 filed by Ranveer Gautam Allahabadia, the court directed the government to consider drafting regulatory measures to prevent the broadcasting or airing of programs that are offensive to well-known moral standards of society. While this order was specifically focused on morality, the government can use this as a basis to come up with well-defined guidelines for the influencer marketing industry as well.

The court’s directive highlights the need for a balance between the fundamental right to free speech and the necessity of reasonable restrictions under Article 19(2) of the Constitution. As influencer-generated content becomes increasingly pervasive and influential, it is crucial to ensure that it adheres to ethical standards, consumer protection norms, and public interest considerations

India’s influencer marketing landscape is still at a nascent stage from a regulatory perspective. However, as the industry grows and attracts more mainstream attention, it is likely to come under further scrutiny from government bodies and consumer protection authorities.

Legal Complexities and Disputes

One of the biggest issues in the current influencer marketing space is the lack of formal, written agreements between parties. Often, the terms of the partnership are loosely defined over email or messaging apps, without a detailed contract that spells out crucial aspects such as deliverables, content ownership, usage rights, exclusivity, termination conditions, payment terms, dispute resolution mechanisms and so on. This informality breeds ambiguity and mismatched expectations, leading to potential conflicts down the line. Without a clear, legally binding agreement, all parties are exposed to uncertainties and have little recourse if things go wrong.

Maintaining Authenticity and Trust

Many influencers, especially those who are new to the field or do it part-time, are not fully aware of their legal rights and responsibilities when it comes to brand partnerships. They may not understand the nuances of disclosures, the implications of the claims they make, or their liability if something goes wrong. In their eagerness to secure deals and build their portfolio, some influencers may agree to unfavourable terms or take on more than they can deliver. Without proper guidance, they may inadvertently put themselves in compromising positions legally and professionally.

Navigating Platform Changes and Competition

The lack of a robust legal framework poses significant risks for companies working with influencers too. Without a formal contract, brands have little control over how their products or messaging are portrayed by the influencer. If the influencer goes off-script, communicates unapproved claims, or gets embroiled in a controversy, the brand’s reputation could suffer with little legal recourse. In some cases, brands may even be held liable for an influencer’s problematic content if proper disclosures are not in place or if the content is found to be misleading or harmful. This exposure is particularly concerning in regulated industries like health, finance, and kids’ products.

The Way Forward

• Formalizing Partnerships through Contracts:As influencer marketing matures in India, it is crucial for all stakeholders – influencers, brands, and intermediaries – to adopt a more structured and legally prudent approach to partnerships. The most important step in this direction is formalizing collaborations through comprehensive, well-drafted contracts. A good influencer agreement should clearly define the scope of work, content guidelines, approval processes, usage rights, exclusivity terms, performance metrics, payment schedule, termination conditions, confidentiality clauses, morality standards, and provisions for dispute resolution. It should also address compliance with advertising regulations and platform-specific guidelines. Having a robust contract in place protects the interests of all parties. It aligns expectations, prevents misunderstandings, and provides a roadmap for navigating any issues that may arise. It also lends credibility and professionalism to the partnership. While some influencers, particularly at the lower end of the spectrum, may be hesitant to invest in legal vetting of contracts, it should be seen as a necessary cost of doing business professionally. The timeless statement “prevention is better than cure” fits here perfectly.

• Preparing for Evolving Regulations:Guidelines and regulatory framework for influencer marketing in India are imminent. As such, it is in the best interest of all stakeholders to start aligning their practices with expected regulations and take it as a moral responsibility to be fair to the consumer and audience. By proactively adopting transparent and ethical practices in line with ASCI’s guidelines and other relevant laws, influencers, brands, and intermediaries can ensure a smooth transition when stricter regulations come into place. This proactive approach will help avoid abrupt changes to the working style and minimize disruptions to ongoing partnerships. Moreover, being ahead of the curve in terms of disclosures, substantiation of claims, and professional contracting will not only help avoid regulatory trouble down the line but also build trust with the audience. In an industry that relies heavily on authenticity and credibility, aligning with evolving regulations can be a competitive advantage.

• Content Should Be Specific: To avoid ambiguity and potential legal issues, it is crucial for both brands and influencers to ensure that the content creation process is as specific as possible. This means having clear guidelines, expectations, and deliverables outlined in the contract. For brands, this involves providing detailed briefs that specify the key messaging, target audience, dos and don’ts, and any specific requirements for the content. The more specific the brief, the less room there is for misinterpretation or creative divergence. Influencers, on their part, should ensure that they understand the brief fully and ask for clarifications if needed before starting the content creation process. They should also communicate their own creative process, style, and limitations upfront to ensure alignment with the brand’s expectations. Having a clear, specific content plan agreed upon by both parties not only ensures a smoother collaboration but also helps mitigate the risk of inter-party or vicarious liability

 

Conclusion

The influencer marketing industry in India is at an exciting but critical juncture. As it grows in size and significance, it is attracting the attention of regulators, consumers, and the mainstream media. In this context, it is imperative for influencers, brands, and intermediaries to prioritize transparency, ethics, and professionalism in their partnerships.

The key to building a sustainable and successful influencer marketing ecosystem lies in adopting a legally prudent, contract-based approach to partnerships. ASCI’s guidelines provide a good starting point for self-regulation, but the real onus is on all players to go beyond the minimum and establish best practices.

Investing in legal expertise to draft robust contracts, ensure regulatory compliance, protect intellectual property, and handle disputes is no longer a luxury but a necessity in this maturing industry. Stakeholders who get their legal ducks in a row today will be the ones who can navigate the opportunities and challenges of this exciting space with confidence and integrity.