As AI reshapes content discovery and monetisation, India’s advertising ecosystem is undergoing a quiet but structural shift where legal accountability is beginning to outweigh marketing ambition.
Artificial intelligence is no longer a back-end optimisation tool in advertising. Across digital platforms, AI systems now decide what content is surfaced, what gains velocity and, crucially, what attracts advertising money. This growing influence is forcing a rethink inside Indian boardrooms. Media buying decisions that once sat squarely with marketing teams are increasingly being reviewed and, in some cases vetoed, by legal and compliance heads.
The change is not ideological. It is regulatory and commercial. As India tightens its digital and AI governance framework, the risks associated with AI-driven amplification are becoming harder for advertisers to ignore. With active oversight by the Ministry of Electronics and Information Technology and shrinking regulatory grey zones, the cost of getting adjacency wrong is no longer limited to social media backlash. It now extends into legal exposure and long-term brand trust.
From media performance to legal exposure
For years, brand safety was treated as a media hygiene issue. AI has altered that equation. When algorithms actively rank, summarise and amplify content, they do more than distribute attention. They shape context. That context increasingly determines whether an ad placement is merely ineffective or legally problematic.
“Indian advertisers are not fully insulated if their ads appear next to AI-amplified misinformation or unlawful content,” said Ekta Rai, an advocate at the Delhi High Court, in comments shared exclusively with e4m. “While platforms claim intermediary protection, Indian law expects active due diligence, especially where algorithms drive visibility and revenue. If those safeguards fail, the immediate legal exposure may sit with the platform, but the reputational and commercial fallout lands squarely on the brand.”
Rai added that advertisers are now expected to assess platform risk alongside campaign performance, a shift that fundamentally changes how media plans are evaluated internally. This expectation has accelerated as AI-driven placements become less transparent, making it harder for brands to argue ignorance or lack of control.
Safe harbour under pressure
India’s safe harbour regime under Section 79 of the IT Act was designed for an earlier internet. Legal experts argue that AI-led amplification is testing its limits. According to Chirag Jain, Associate Partner at DSK Legal, the protection is conditional and begins to weaken once platforms stop acting as neutral conduits.
“In India, a safe harbour is not guaranteed,” Jain said. “It starts to erode the moment AI systems move from passive hosting to actively ranking, summarising or monetising content to drive engagement or ad revenue. When a platform continues to amplify misinformation or unlawful material despite notice and without credible safeguards, the law is likely to treat that as facilitation, not intermediation.”
Jain also cautioned advertisers against assuming that platform immunity extends to brands. “Even where a platform claims safe harbour, advertisers remain answerable for consumer harm and misleading association. Regulators look at outcomes, not contracts. If advertisers cannot show active due diligence, brand safety controls and monitoring of AI-driven placements, the risk lands with the brand.”
This interpretation has direct implications for how advertising contracts are structured and reviewed. Legal teams are increasingly scrutinising adjacency clauses, indemnities and monitoring mechanisms, areas that were earlier treated as boilerplate.
India as a regulatory stress test
What makes India stand out is the pace at which accountability expectations are evolving. Jain believes the country is fast becoming a jurisdiction where AI cannot be monetised without being legally defensible first. “Advertisers are no longer buying reach alone. They are buying risk architecture,” he said. “In practical terms, monetisation follows accountability, not the other way around.”
Rohit Jain, Managing Partner at Singhania and Co, framed the issue through the lens of platform behaviour. “Safe harbour protection exists because intermediaries were seen as passive infrastructure,” he explained. “If a platform does not initiate or modify content, it is treated as a neutral conduit. But the moment an AI system amplifies content to maximise engagement and ad revenue, that neutrality is compromised.”
He added that when algorithms prioritise sensational or unverified AI content because it performs better commercially, platforms risk being treated as publishers rather than intermediaries. That distinction materially alters liability exposure and, by extension, advertiser risk.
Legal design becomes a commercial necessity
As oversight tightens, the focus is shifting from post-facto compliance to design-stage accountability. Himesh Thakur, Associate Partner at PSL Advocates and Solicitors, said many platforms are still adapting to this reality. “The regulatory direction is clear. Governance, bias mitigation and accountability must be embedded at the design stage, not patched in after launch,” he said. “That requires deep integration between legal, policy and product teams, something many technology companies are still learning to operationalise.”
He noted that India’s proposed digital reforms signal a future where safe harbour may become the exception rather than the rule. In such a scenario, ad-tech systems will be judged less by innovation speed and more by legal resilience.
Saswati Soumya Sahu, Partner at ANB Legal, pointed to recent regulatory actions as evidence of intent. “Regulators have made it clear that failure to comply with takedown obligations and content safeguards can result in loss of legal protection,” she said. “These actions underline that technology-driven abuse will not be treated lightly, especially where AI systems are involved.”
A reset for advertising economics
The cumulative effect of these developments is a structural shift in advertising economics. For heavily regulated sectors and large consumer brands, legal certainty is becoming a prerequisite for scale. Media plans are being ring-fenced, approvals are expanding beyond marketing and platforms are being evaluated not just on performance but on governance maturity.
This does not mark a retreat from AI-led advertising. Instead, it signals its coming of age. In India’s market, innovation is increasingly being measured by what can be responsibly defended in court as much as by what can be optimised in code.
What was once dismissed as a brand safety concern has become a legal and compliance decision. And as AI continues to shape how content and commerce intersect, India is emerging as one of the first major markets where advertising growth must clear the bar of accountability before it earns trust.