The Aakhya Weekly #139 | India’s Influencer Economy: Booming, But Who’s in Charge?
In Focus: Navigating the New Power Structures of Influence
by Yashvika Malhan
Union Minister Ashwini Vaishnaw announced a $1 billion fund for digital creators. PM Modi recently sat down for a podcast with Lex Fridman, diving into everything from his early life to the Himalayas. Meanwhile, 11 social media influencers are facing legal action for promoting betting apps.
This is not just a string of unrelated headlines. It reflects India’s influencer economy, which, in recent years, has exploded from a niche subculture to a billion-dollar industry influencing consumer behaviour, cultural trends, business strategies and even policy discourse. India now has over 4.06 million influencers, and the industry is expected to grow to ₹3,375 crore by 2026, up from ₹2,344 crore in 2024, according to an EY study. From personal finance advice to policy messaging, influencer-led channels now command trust that brands—and even governments—want to tap into.
But as the sector matures, the real question emerges: who regulates this growing industry, and how?
The Business of Influence Meets the Business of Regulation
In India, the influencer economy operates in a regulatory grey zone. Unlike traditional media, where advertising standards and accountability measures are well-defined, influencer marketing is still evolving. Brands now treat influencer-led channels as legitimate sales drivers, and audiences, particularly Gen Z, see influencers as relatable alternatives to celebrities. It also means influencers wield significant sway, sometimes even more than mainstream media.
Regulators have started paying attention.
The Advertising Standards Council of India (ASCI) introduced a self-regulatory framework for influencers in 2021. It mandates clear disclosures on paid partnerships, free products, and sponsored content. The Department of Consumer Affairs (DoCA) followed up with the 'Endorsement Know-Hows' guidelines, further tightening the rules. Unlike ASCI, DoCA does not set a minimum follower count to define an influencer but requires endorsements to base themselves on genuine personal experience.
Financial influencers, or most commonly “Finfluencers”, face greater scrutiny when compared to lifestyle or entertainment influencers. This is partly because financial misinformation carries direct financial risks, making regulatory intervention more urgent. The Securities and Exchange Board of India (SEBI) mandates registration for influencers providing financial advice. Fund houses and registered financial entities are barred from working with unregistered influencers unless their content is purely educational. Yet some fininfluencers operate within SEBI’s framework, others often straddle the line between education and indirect endorsement.
But regulation is only as effective as its enforcement. While ASCI and DoCA have mechanisms in place, compliance remains inconsistent. Many influencers still fail to disclose paid promotions, and enforcement agencies struggle due to capacity constraints in monitoring millions of posts daily. In 2023, ASCI flagged over 800 instances of misleading influencer marketing, but whether those notices led to meaningful compliance remains unclear.
Governments Are Now Clients, Too
Beyond regulation, governments themselves are now active players in the influencer economy. Nearly 10 states have launched influencer engagement programs or policies, including Uttar Pradesh, Haryana, Karnataka, and Punjab. These policies often include an empanelment system, allowing influencers to register with the government and receive financial compensation for promoting welfare schemes, public health initiatives, and tourism campaigns. Some states also offer non-monetary incentives, such as sponsored trips, exclusive collaborations, and content amplification through official channels.
Governments leveraging influencers for policy communication is not inherently problematic. It reflects an effort to stay relevant in an evolving media landscape and engage with a younger, digital-native audience. However, concerns arise when such partnerships risk blurring the lines between outreach and influence—potentially leading to self-censorship or the amplification of selective narratives. Critics argue that these policies could create an uneven playing field, where influencers who align with state messaging gain access to resources while dissenting voices are sidelined.
Transparency is key. If government collaborations are disclosed and open to scrutiny, they can enhance civic engagement without compromising digital autonomy. If not, they risk becoming tools of selective amplification rather than genuine public engagement.
The Fine Line Between Regulation and Censorship
When influencer Ranveer Allahabadia faced backlash over a comment on a YouTube Influencer’s program, it wasn’t just a controversy— but a reflection of India’s evolving digital landscape. Unlike traditional media, where regulation is explicit, influencer content exists at the intersection of free speech, business interests, and government oversight.
Governments worldwide grapple with the challenge of balancing regulation with digital freedom. India has leaned toward self-regulation rather than direct intervention. Platforms like Instagram, YouTube, and X play a growing role in content moderation, but should they be responsible for enforcing influencer compliance? Currently, these platforms remove misleading or harmful content post-factum, but proactive regulation remains limited. Legal experts caution that if platforms are forced to pre-screen content, they risk becoming active gatekeepers rather than neutral intermediaries, raising concerns over censorship.
Selective enforcement is another risk. While finfluencers promoting unregulated schemes face scrutiny, influencers amplifying government messaging often operate with fewer restrictions. If oversight becomes a means of controlling narratives rather than ensuring transparency, it could stifle independent voices and creative expression. A regulatory framework that disproportionately targets some influencers while giving others a free pass risks turning regulation into an instrument of control rather than consumer protection.
Then there’s the issue of liability. In cases where an influencer promotes a product that turns out to be faulty or a financial scheme that collapses, should they be held accountable? Right now, the answer varies. DoCA’s guidelines suggest influencers must conduct due diligence before endorsements, however, there is little clarity on what level of scrutiny is expected. The lack of a structured dispute resolution mechanism adds another layer of complexity.
What Comes Next?
As you read this, new trends emerge, more influencers rise, and newer platforms gain traction. The influencer economy is no longer confined to Instagram reels or YouTube vlogs. LinkedIn influencers are reshaping professional discourse, while AI-generated influencers are blurring the line between digital personalities and brand avatars. These shifts are expanding the ‘very’ definition of influence, forcing regulators to rethink how policies apply to an increasingly algorithm-driven ecosystem.
The Indian government’s $1 billion fund for digital creators officially recognises the sector as a driver of consumer trends and a legitimate pillar of the digital economy. Whether this fund democratises opportunities for independent creators or reinforces existing power structures will determine the trajectory of India’s creator economy in the coming years.
Regulation will be the defining factor. The era of unregulated influence is over, but the challenge lies in crafting a framework that safeguards consumers without stifling creativity. Like many countries, India will confront challenges like balancing transparency with autonomy and ensuring accountability without selective enforcement. The next phase of policymaking will decide whether regulation becomes an enabler or a constraint—whether it builds trust or introduces new gatekeepers.
For now, the industry is growing. The audience is engaged. And the regulators? They’re watching closely.
Top Stories of the Week
India and Australia Strengthen Defense Ties at 9th Defence Policy Talks
On Monday, the 9th India-Australia Defence Policy Talks took place in New Delhi, where both nations reaffirmed their commitment to deepening defence cooperation. Discussions focused on key priorities such as maritime domain awareness, reciprocal information sharing, defence industry collaboration, advancements in science and technology, and participation in defence trade expositions. Both sides also reviewed the outcomes of recent high-level engagements, including the second Ministerial Foreign and Defence Ministers’ 2+2 Dialogue in November 2023, the inter-sessional 2+2 consultations in October 2024, and the second Annual Leaders’ Summit in November 2024.
In addition to bilateral defence cooperation, the delegations exchanged perspectives on regional and global security challenges, reaffirming their shared commitment to maintaining peace and stability in the Indo-Pacific. Both nations expressed their intent to develop a long-term vision for defence and security collaboration in preparation for the 2+2 Ministerial Dialogue scheduled in Australia in 2025. This includes enhancing interoperability across maritime, land, and air domains while strengthening partnerships with multilateral allies. During their official visit, the Australian delegation also toured Mazagon Dock Shipbuilders Ltd. in Mumbai, highlighting the growing significance of defence industry collaboration between the two countries.
Govt Approves Six-Lane Greenfield Highway to Boost Connectivity Between JNPA Port and Navi Mumbai Airport
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the construction of a six-lane, access-controlled Greenfield High-Speed National Highway connecting JNPA Port (Pagote) to Chowk in Maharashtra. This project aligns with the PM Gati Shakti National Master Plan, enhancing connectivity between key infrastructure hubs, including the upcoming Navi Mumbai International Airport, set to open in 2025. Currently, vehicles travelling from JNPA Port to NH-48 and the Mumbai-Pune Expressway face severe congestion, with delays of 2-3 hours due to bottlenecks at Palaspe Phata, D-Point, Kalamboli Junction, and Panvel, where traffic reaches approximately 1.8 lakh Passenger Car Units (PCU) daily.
The new highway will provide direct access, reducing travel time and easing congestion. Two tunnels through the Sahyadri mountain range will enable large container trucks to bypass hilly sections, ensuring smoother freight transport. This corridor will enhance logistics efficiency, lower transportation costs, and support economic growth by strengthening trade routes and facilitating seamless goods movement.
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