In Focus: The New Rules of the Creator Economy
Remember in 2025, a Chinese creator’s viral video falsely claimed that luxury brands like Hermès and Louis Vuitton sourced bags from low-cost factories. Within days, outrage spread globally, counterfeit sales surged, and billions in brand reputation came under threat. The video went viral, and within 48 hours, thousands of comments flooded in from outraged consumers. The hashtag #ChineseManufacturer accumulated millions of views. At the same time, three of the world’s most powerful luxury houses, Hermès, Louis Vuitton, and Chanel, found themselves at the centre of a global reputation crisis. Later confirmed that the claims were largely fabricated. The videos were part of a well-oiled machine promoting counterfeit goods under the guise of “exposing” the truth, a geopolitical trade-war gambit disguised as consumer advocacy.
One creator. One smartphone. Billions of dollars in brand equity are at risk.
The Industry that Rewrote the Rules of Trust
There was a time when trust in advertising was bought through expensive television slots and magazines’ double-page spreads. That era is over. Today, trust is built and destroyed by people with phones, ring lights, and follower counts. The influencer and creator economy is no longer a sideshow to mainstream media. It is the main stage. What began as a trend for hobbyist bloggers and YouTubers has evolved into a professionalised, multi-billion-dollar industry that moves stock prices, elects politicians, shapes diets, and dictates fashion. It has democratised the idea of who gets to speak and to how many people.
The scale of this transformation is unprecedented. The global influencer marketing industry grew from $1.4 billion in 2014 to nearly $32.5 billion in 2025 and is projected to cross $40 billion by 2026. Brands today earn an estimated $5.78 for every $1 spent on influencer campaigns, making creators one of the most powerful tools in modern advertising. While the USA remains a dominant market, Asia is driving the next phase of expansion. China alone is expected to record over $23 billion in influencer advertising expenditure in 2025, while India, with more than 360 million Instagram users and one of the world’s youngest digital populations, is emerging as a major creator economy.
Opportunity Meets Ambiguity
India’s creator economy is rapidly evolving into a structured commercial ecosystem, but its growth has outpaced the development of accountability mechanisms. In an algorithm-driven digital environment, viral content is often consumed and circulated without scrutiny, while engagement is rewarded over accuracy, and outrage spreads faster than facts.
A major policy challenge lies in the absence of regulatory clarity for creators, who simultaneously function as advertisers, publishers, entertainers, and opinion-makers, devoid of a unified legal framework. This fragmented oversight has created uneven compliance standards, particularly between large professional creators and smaller influencers operating without awareness of advertising norms or legal liabilities. Further, platform algorithms incentivise sensational and emotionally charged content, increasing the spread of misinformation and misleading promotions. Influencers today shape consumer behaviour, financial decisions, and public discourse, often without adequate verification standards. This regulatory vacuum highlights the urgent need for a balanced governance framework that protects innovation while ensuring transparency, accountability, and public trust.
Global Crackdown: What Other Countries Are Doing
As the creator economy expands, governments across the world are moving from voluntary self-regulation to formal legal oversight.
China has adopted one of the most stringent approaches. Authorities have imposed tight controls on livestreaming, influencer income, and online content, requiring creators to comply with state-defined ethical and cultural standards. Financial disclosures, identity verification, and restrictions on “vulgar” or misleading content form part of a broader state-led digital governance model.
In contrast, Western jurisdictions have largely focused on transparency and accountability. The United States and the European Union mandate disclosure of paid promotions and sponsored content under advertising and consumer protection laws. Regulators increasingly impose penalties on creators and brands for deceptive endorsements, undisclosed advertisements, and misleading claims, particularly in sectors such as finance, health, and crypto-assets.
The United Kingdom has emerged as a leading case study in regulating “finfluencers.” In 2025, the UK’s Financial Conduct Authority (FCA), along with regulators from Australia, Canada, Italy, Hong Kong, and the UAE, launched a coordinated crackdown on influencers illegally promoting financial products online.
Similarly, countries in the Middle East, including Saudi Arabia and the UAE, have introduced licensing frameworks requiring influencers engaged in commercial promotion to obtain permits and comply with advertising regulations.
The global trend is therefore clear: governments are no longer treating the creator economy as an unregulated extension of free expression. Instead, creators are increasingly being integrated into existing frameworks of consumer protection, advertising regulation, financial compliance, and digital governance. The central policy question is no longer whether the creator economy should be regulated, but how to regulate it without undermining innovation and freedom of expression.
India’s Regulatory Crossroads
India’s regulatory approach toward the creator economy is gradually evolving from voluntary self-regulation to a more structured digital governance framework. The government has signalled a greater focus on intermediary accountability, misinformation control, AI-generated content disclosures, SGI labelling mandates, and faster grievance redressal mechanisms. Simultaneously, industry-led bodies such as the Indian Influencer Governing Council (IIGC) and the Advertising Standards Council of India (ASCI) are attempting to introduce ethical standards and self-regulatory practices for influencer marketing. However, the current ecosystem remains fragmented, with overlapping jurisdiction between advertising standards, consumer protection laws, IT regulations, and platform policies. Therefore, India requires a balanced and future-oriented “Creator Economy Governance Framework” that combines innovation with accountability.
First, the law must clearly define categories of creators based on scale, revenue, and content type. Such classification would allow differentiated regulation, ensuring that compliance obligations remain proportionate to influence and risk. For example, creators operating in high-impact sectors such as finance, healthcare, education, or political communication should be subject to stricter disclosure, verification, and liability standards compared to lifestyle or entertainment creators.
Second, accountability mechanisms need to be institutionalised across the creator economy value chain. This includes mandatory disclosure norms, standardised brand contracts, grievance-redressal frameworks, and clear liability provisions for harmful or misleading content.
Third, through incentive-based governance. Instead of relying on punitive measures, compliant creators could be rewarded through verified credibility badges, tax incentives for transparent disclosures, or preferential visibility in platform partnerships. Industry certification programmes—similar to professional accreditation systems could create a trust-based digital ecosystem where credibility becomes commercially valuable.
Another key area for reform is platform accountability. Platforms must submit annual Algorithmic Risk Assessment Reports to disclose details on how recommendation systems amplify content in sensitive categories. The EU’s DSA Article 40 researcher data access provision, now in force since October 2025, provides the template. India’s February 2026 IT Rules already mandate SGI metadata embedding; extending that logic to algorithmic transparency is incremental, not radical.
Balancing Freedom and Responsibility
The central policy challenge is to strike a balance between enabling innovation and safeguarding public interest. Overregulation risks stifling creativity and limiting opportunities for new entrants, while underregulation can erode trust and cause systemic harm. The question is no longer whether the ecosystem should be regulated, but how regulation can evolve without undermining creativity and free expression. The objective is to build responsible digital governance.
A future-ready framework must combine transparency and accountability, with digital literacy and co-regulation. Equally important is recognising creators as part of India’s formal digital economy through clarity in taxation, skilling, and institutional support.
Top Stories of the Week
GoI Announces the ECLGS 5.0 Scheme; Special Relief for MSMEs and Aviation Sectors
The Union Government has approved the Emergency Credit Line Guarantee Scheme (ELCGS) 5.0 to support businesses affected by the West Asian crisis triggered by the United States-Iran war. It will provide additional credit support with 100% guarantee coverage for small and medium enterprises and 90% coverage for non-MSME sectors. The quantum of support is additional credit up to 20% of the highest working capital utilised during Q4 FY26, capped at Rs 100 crore. According to a report by SBI research, ~1.1 crore MSME accounts (~45% of the total MSME portfolio) will be eligible to benefit from the scheme with an average additional credit flow of Rs 2 to 2.3 lakh.
Additionally, a 100% coverage for the airlines sector, capped at Rs 1,500 crore per borrower, has been announced. The tenure of the loan will be 7 years from the date of first disbursement, including a moratorium of 2 years. This will benefit the aviation sector with high Air Turbine Fuel (ATF) costs and a reduction in passenger traffic. At full disbursement of Rs 5000 crore earmarked for the aviation sector, the proposed measure will be around 9.5% (Rs. ~526 crore) of the outstanding credit, facilitating recovery. The ECLGS scheme will support businesses, maintain operations, prevent MSMEs from shocks, protect jobs, prevent NPAs and sustain supply chains amid conflict-related disruptions.
India–Vietnam to ramp up trade by USD 9 bn in 4 years; Vietnam joins IPOI
India and Viet Nam have set an ambitious bilateral trade target of USD 25 billion by 2030 under their “Enhanced Comprehensive Strategic Partnership”, aiming to add nearly USD 9 billion in trade over the next four years through deeper multi-sectoral engagement. Bilateral trade between the two countries currently stands at USD 16 billion, marking a 10% year-on-year increase. The decision followed talks between Prime Minister Narendra Modi and Vietnamese President To Lam, with both sides agreeing to strengthen cooperation in pharmaceuticals, agriculture, fisheries, animal husbandry, defence, and security.
The two countries signed 11 agreements, while Vietnam also joined the Indo-Pacific Oceans Initiative (IPOI), a significant strategic development amid rising concerns over China’s growing assertiveness in the South China Sea region. The two countries reaffirmed that defence and security cooperation remain key pillars of the comprehensive strategic partnership, with emphasis on maritime security, regional stability, and a free, open, and rules-based Indo-Pacific.
India and Vietnam have shared close diplomatic and economic ties for over five decades. India was among the first countries to establish a Strategic Partnership with Viet Nam in 2007, which was later elevated to a Comprehensive Strategic Partnership, reflecting convergence in economic, strategic, and regional interests.
A Few Good Reads
Tara Kartha writes that while Operation Sindoor demonstrated calibrated escalation and strategic restraint under a nuclear overhang, any future India–Pakistan confrontation will unfold in a far more volatile environment.
Pramit Bhattacharya argues that India’s fragmented labour regime, marked by unequal protections, weak enforcement, and excessive regulatory complexity, has constrained manufacturing growth and job creation.
Debadityo Sinha argues that the Supreme Court’s endorsement of a narrow, elevation-based definition of the Aravalli Range risks weakening long-standing ecological protections.
Katja Hoyer contends that attempts to ban the AfD risk repeating the mistakes of the Weimar Republic era.
Noah Smith examines the AI industry’s emerging shift from portraying artificial intelligence as a job-destroying force to positioning it as a human-augmenting technology.