Regulatory shifts redefine India's influencer marketing landscape in 2024

The influencer marketing industry in India has undergone significant transformations in 2024, with new regulations redefining ethical practices and advertising norms.

From financial influencers facing stricter SEBI guidelines to the rise of cryptocurrency endorsements and the crackdown on surrogate advertising, the evolving rules emphasise transparency and accountability.

The finance niche, a lucrative arena for content creators, has come under the scrutiny of the Securities and Exchange Board of India ( Sebi ).

Finfluencers, or financial influencers, are now required to register before offering any investment advice. This step is aimed at curbing misinformation and protecting retail investors from unverified financial claims.

Prominent creators like "Baap of Chart" have faced penalties for violating guidelines. Sebi’s framework mandates proper credentials, disclosure of brand collaborations, and disclaimers for high-risk financial products like cryptocurrencies.

Commenting on the need for guidelines in this domain, Justin, a seasoned finfluencer, said it was essential to prioritise ethics over earnings, and that dolling out misleading advice can have catastrophic consequences for followers.

Sharing similar views was Rahul Tekwani, owner of Branding Edge, who highlighted the need for clear communication in this high-stakes sector. Tekwani argues that SEBI’s involvement is critical to fostering credibility in a space that directly impacts financial well-being.

Cryptocurrency Concerns

Cryptocurrency companies have increasingly turned to social media influencers to broaden their reach, particularly among younger audiences. With their advertising budgets rising by 20 per cent, influencer endorsements have become a strategic tool for the sector. However, non-compliance with the Advertising Standards Council of India (ASCI) guidelines is rampant in this category.

Influencers like Lakshay Chaudhary and TheFinancialYogi have faced flak for promoting crypto platforms without mandatory risk disclaimers. ASCI regulations require influencers to clearly state the speculative nature of virtual digital assets, including potential capital loss. Experts warn that omitting these disclaimers to maintain engagement can mislead audiences, especially given the volatile nature of the crypto market.

Daisy Roy, a sports and entertainment lawyer, points out the ethical dilemma influencers face when endorsing high-risk financial products. “Influencers need to recognise the responsibility they carry. A misleading endorsement in this domain can have far-reaching consequences,” she states.

Betting and Gaming Ads Under Fire

Illegal betting and gambling platforms have exploited surrogate advertising to bypass legal restrictions, promoting services under ambiguous names like "Dafa News" during events such as the Pro Kabaddi League.

ASCI flagged over 700 such ads between April and August 2024, prompting the removal of many following government intervention.

Social media platforms like Instagram have become hotspots for such promotions, exposing influencers to legal and reputational risks. Daisy Roy emphasises that influencers must rigorously vet campaigns to ensure compliance with ASCI guidelines. “India’s hero-worship culture amplifies the impact of endorsements, making ethical considerations non-negotiable for influencers,” she added.

Surrogate Advertising in Beverages

The government’s crackdown on surrogate advertising , particularly in the alcohol sector, reflects a decisive shift towards ethical advertising practices. Proposed draft rules now require alcohol companies to report sales data for surrogate products like music CDs or playing cards, ensuring transparency.

Celebrities endorsing these products face heightened scrutiny under the Central Consumer Protection Authority (CCPA). The Supreme Court has also weighed in, emphasising endorsers’ liability for misleading advertisements. The court mandates that broadcasters submit compliance declarations before airing such ads, a move that is expected to extend to print media.

ASCI, SEBI & Beyond

Regulators like ASCI and SEBI are driving the push for transparency across the influencer ecosystem. ASCI mandates clear disclosure of brand associations and the inclusion of disclaimers for high-risk products. In the financial sector, SEBI’s guidelines require credentials and transparency, ensuring only qualified individuals offer investment advice.

These rules are complemented by the Consumer Protection Act, which penalizes influencers and brands for misleading advertisements. The Department of Consumer Affairs has introduced fines of up to Rs 50 lakh and bans for repeat offenders, signalling the government’s intent to foster accountability.

ASCI released its Half-Yearly Complaints Report for 2024-25, reveals the risks for influencers engaging in non-compliant promotions. Social media platforms like Instagram and TikTok have become hotbeds for illicit betting ads, exposing creators to reputational and legal consequences.

ASCI’s streamlined complaint resolution time, reduced to 18 days, and its proactive monitoring signal a robust enforcement stance. With 53% of flagged ads voluntarily withdrawn, the push for ethical advertising is gaining momentum, highlighting the necessity for collaboration between regulators, brands, and influencers to foster a transparent digital advertising ecosystem.

Real estate ads represented 34% of the complaints, with 1,027 out of 2,115 advertisements flagged for non-compliance under the Maharashtra Real Estate Regulatory Authority (MahaRERA) Act. Astonishingly, 99% of these were found in violation, leading to penalties totaling ?88.9 lakhs for 628 developers. Offshore betting ads, comprising 29% of violations, primarily leveraged influencers and social media tickers to promote illegal gambling apps. ASCI referred 890 such ads to the Ministry of Information and Broadcasting (MIB), prompting swift removal action.

The report also flagged 100 advertisements for “greenwashing,” where misleading environmental claims were made without credible data.

Toward 2025

"By implementing stringent registration requirements, we are creating a more responsible and trustworthy influencer ecosystem that prioritizes consumer protection and industry integrity," says Viren Vesuwala, Lead - Strategic Partnerships & Alliances at White Rivers Media. He emphasizes that SEBI's mandate for financial influencers to register before providing advice is a monumental step towards establishing accountability in the sector, ensuring that only qualified individuals can guide crucial financial decisions.