Delegated Persuasion: Agency Theory And Influencer Liability In India
Vandita Ventrapati, B.A. LL.B. (Hons), Woxsen University
ABSTRACT
Influencer marketing has become one of the most commercially significant forms of advertising in India, and one of the least legally resolved. Creators promote products across sectors skincare, health supplements, financial services, betting platforms in a format that looks personal but functions as paid commercial communication. India has regulatory instruments to address this: the Consumer Protection Act, 2019, the Central Consumer Protection Authority’s endorsement guidelines, and the Advertising Standards Council of India’s influencer advertising standards. What these instruments have not adequately resolved is who bears legal responsibility when a jointly produced, brand-funded endorsement turns out to be misleading. This paper argues that agency principles, applied functionally to the Indian regulatory context, provide a more coherent basis for answering that question than disclosure-based rules alone. It develops the concept of delegated commercial persuasion to explain the influencer-brand relationship, analyses the relevant provisions of the Indian Contract Act, 1872, and draws on ASCI’s Half-Yearly Complaints Report 2025–26 to show that the current framework has not produced meaningful compliance. The paper concludes that a disclosure failure and a misleading representation are analytically distinct harms, and that Indian law already has the tools to treat them as such what is needed is the will to use them.
Keywords: influencer marketing, agency theory, consumer protection, disclosure, liability, ASCI, CCPA, misleading advertisements
