ASCI flags unsubstantiated claims as a growing risk for India’s D2C brands

India’s D2C founders and investors are being urged to scrutinise advertising claims alongside financial, legal and data-security diligence, as misleading or unsubstantiated marketing can trigger consumer-law, regulatory and governance risks.

— Source published Wed, 19 Aug, 2026, 11:05 IST · First seen Thu, 20 Aug, 2026, 09:30 IST · Source ET BrandEquity

What happened

Advertising Standards Council of India (ASCI) · ASCI’s secretary general warns that Indian D2C brands often use unsubstantiated advertising claims, creating

Key facts

  • 18 months

Why this matters

In M&A evaluations, review the target’s advertising claims, substantiation records and complaint history as potential sources of contingent liability.

What to watch

  • Increase in ASCI complaint volumes or upheld decisions involving D2C, influencer-led or digital-only brands.
  • Consumer-protection authority actions, fines, takedown orders or marketplace delistings tied to misleading advertisements.
  • Investor term sheets, acquisition checklists or insurer questionnaires explicitly requesting advertising-claim substantiation.
  • Rising use of lab tests, clinical studies, certifications and third-party verification in D2C campaigns.
  • Marketplace and social-platform policy updates requiring evidence for health, sustainability, pricing or endorsement claims.
  • Competitor complaints targeting category-leading claims in beauty, nutraceuticals, food, personal care and household products.
  • Create a central claims register linking every live marketing assertion to evidence, approval owner, geographic applicability and renewal date.
  • Add advertising-compliance review to board, investor and M&A diligence packs, including historical complaints, ASCI decisions, refunds, influencer contracts and substantiation files.
  • Prioritise audits of health, wellness, beauty, nutrition, environmental, price-comparison, 'best' and 'clinically proven' claims.
  • Require pre-clearance for creator content, customer testimonials, before-and-after imagery, endorsements and limited-time discount messaging.
  • Build product, legal, marketing and customer-service escalation processes so challenged claims can be paused and corrected quickly.

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