India: Advertising Law In India - Part 1

Last Updated: 17 August 2012

Article by Hemant Goyal & Jitender Jain1

1 Introduction

At present in India, there is no central statutory agency or uniform legislation regulating the advertising industry. The Indian advertising market as a whole is regulated and controlled by a non-statutory body, the Advertising Standards Council of India (ASCI). In the absence of uniform integrated legislation, it is necessary for advertisers to ensure that an advertisement is in compliance will all local and national advertisement laws.

1.1 Role of the Advertising Standards Council of India (ASCI)

ASCI is a voluntary self-regulatory council established in 1985 to promote responsible advertising and to enhance public confidence in advertisements. The council's objectives are:

  • To ensure the truthfulness and honesty of representations and claims made by advertisements
  • To ensure that advertisements are not offensive to generally accepted standards of public decency
  • To safeguard against the indiscriminate use of advertising for the promotion of products regarded as hazardous to society or to individuals.
  • To ensure that advertisements observe fairness in competition so as to inform the consumer on choices in the marketplace while observing the canons of generally accepted competitive behavior in business

ASCI consists of a Board of Governors and a Consumer Complaints Council. The Board of Governors comprises four members from each of the four sections connected with the advertising industry:

  • Advertisers
  • Advertising Agencies
  • Media (owners of press, television, radio etc.)
  • Related sectors (e.g. outdoor agencies, PR, market researchers, ad producers, business schools)

1.2 The ASCI Code: Self-Regulation of Advertising

To regulate advertisement in India, ASCI has adopted a Code for Self-Regulation in Advertising ("ASCI Code"), which applies to all involved in the commissioning, creation, placement, or publishing of advertisements. This ASCI Code applies to advertisements read, heard, or viewed in India even if they originate or are published abroad so long as they are directed to consumers in India or are exposed to a significant number of consumers in India.

Though non-statutory, the ASCI Code is recognized under various Indian laws in addition to being adopted by advertising-industry bodies. Notably, the ASCI Code provides that it is not in competition with any law,its rules, or the machinery through which they are enforced, thus the ASCI Code is designed only to complement legal controls under such laws and not to usurp or replace them.

1.3 Laws: Statutory Regulation of Advertising

Complementing the ASCI Code are Indian laws governing specific media, specific populations, and specific goods and services. The most significant of these laws are listed here.

Laws Governing Media

  • The Press Council Act 1978
  • Cable Television Network Rules, 1994
  • Code for Commercial Advertising on Doordarshan and All India Radio
  • Electronic Media Monitoring Centre (EMMC)
  • Norms for Journalist Conduct issued by the Press Council of India
  • Code of Conduct of the News Broadcasters Association

Laws Protecting Society and the Consumer

  • Emblems and Names (Prevention of Improper Use) Act, 1950
  • Young Persons (Harmful Publications) Act, 1956
  • Companies Act, 1956
  • Standards of Weight & Measures Act, 1976
  • Indecent Representation of Women (Prohibition) Act, 1986
  • Consumer Protection Act, 1986
  • Laws related to intellectual property rights

Industry-Specific Laws

  • The Drugs and Cosmetic Act, 1940
  • The Transplantation of Human Organs Act, 1994
  • The Drugs and Magical Remedies (Objectionable Advertisements) Act, 1954
  • The Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994
  • Advocates Act, 1961
  • Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992
  • Securities and Exchange Board of India Act, 1992
  • The Prize Chits and Money Circulation Schemes (Banning) Act, 1978
  • Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003
  • Public Gambling Act, 1867, the Lotteries (Regulation) Act, 1998 and the Prize Competitions Act, 1955
  • Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002
  • The Food Safety & Standards Act, 2006

2 Products and Services Banned From Advertising

2.1 Tobacco

The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 ("Tobacco Prohibition Act") prohibits all direct and indirect adertising of tobacco products in all media.

2.2 Human Organs

The Transplantation of Human Organs Act, 1994: This law provides for the regulation of removal, storage and transplantation of human organs for therapeutic purposes and for the prevention of commercial dealings in human organs. This law prohibits any advertising inviting persons to supply, offering to supply, any human organ for payment.

2.3 Magical Remedies

The Drugs and Magical Remedies (Objectionable Advertisements) Act, 1954 prohibits advertisement of magical remedies of diseases and disorders.

2.4 Services for Pre-Natal Determination of Sex

The Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994 prohibits advertisements relating to pre-natal determination of sex.

2.5 Infant formula

Advertising forbidden in order to encourage natural feeding of infants. See details under Food.

2.6 Prize Chits and Money Circulation Schemes

The Prize Chits and Money Circulation Schemes (Banning) Act, 1978 prohibits advertisements relating to prize chit2 and money circulation schemes.

2.7 Physicians

Under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, issued under the Indian Medical Council Act, 1956, physicians are not allowed to advertise their services in any form or manner of advertising through any mode, as soliciting of patients directly or indirectly, by a physician, by a group of physicians, or by institutions or organizations is unethical. (A physician refers to a doctor with a qualification of MBBS or MBBS with a postgraduate degree/diploma or with an equivalent qualification in any medical discipline.) However, medical practitioners are allowed to make a formal announcement in press regarding the following:

  • On starting practice
  • On change of type of practice
  • On changing address
  • On temporary absence from duty
  • On resumption of another practice
  • On succeeding to another practice
  • Public declaration of charges

2.8 Legal Services

The Bar Council of India Rules formulated under the Advocates Act 1961 strictly enforce the advertisement ban and publicity rules governing law firms' websites. These rules were enacted and enforced to curb the false advertisement of lawyers to gain publicity to attract clients.

3 Regulations Related to Product and Service Advertising

3.1 Alcohol (Beer, Wine, and Spirits)

The Cable Television Network Rules, 1994, the Advertising Codes of Doordarshan, and the All India Radio and Norms for Journalist Conduct issued by the Press Council of India prohibit any advertisement directly or indirectly promoting the production, sale, or consumption of cigarettes, tobacco products, wine, liquor, or other intoxicants. However, some states allow advertising through billboards, signboards etc. but subject to many restrictions. Also, the ASCI Code prohibits use of minors for advertising alcohol products.

3.2 Professionals such as Chartered Accountants, Company Secretaries & Cost Accountants

These professionals are prohibited from soliciting clients or professional work by advertisement. However, they may issue advertisements about their firm or services of their firm, through any mode of transmission, having inter alia details of names of partners, address and website, telephone, mobile, e-mail, fax number of the member, year of establishment, additional recognized qualifications, languages spoken by the partner(s), honours or awards in the field of teaching, research, authorship etc.

3.3 Firearms, Weapons, and Ammunition

Sale and purchase of such items requires a license from government authorities. Therefore, advertisements related to such products are not permissible in India under the Arms Act, 1959.

3.4 Food

As per the Food Safety & Standards Act, 2006, no advertisement relating to the standard, quality, quantity or grade-composition, and no representation concerning the need for, or the usefulness of any food can be made which is misleading or deceiving or which contravenes the provisions of this law or rules and regulations made thereunder.

3.5 Infant Milk Food

The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 prohibits the advertising of infant milk substitutes or feeding bottles.

3.6 Gaming (gambling, games of chance; differentiate between private-sector and "state" lotteries)3

The federal structure in the Constitution of India explicitly gives the States the right to legislate upon "gambling and betting". The Public Gambling Act, 1867 prohibits gambling activities in India. However, the Public Gambling Act permits games of mere skill. In April, 2011, the Information Technology Act, 2000 was also amended to ban Internet gambling and online betting websites. The Lotteries (Regulation) Act, 1998 gives power to the concerned State government to hold lotteries subject to prescribed conditions. Under section 294-A of the Indian Penal Code, advertisements of a lottery unless it is in accordance with the Lotteries (Regulation) Act shall be punishable.

The Prize Competitions Act, 1955controls and regulates prize competitions in certain parts of India and prohibits the advertisement of unauthorized prize competitions.

3.7 Medical Devices

The authority principally responsible for regulating medical devices in India is the Central Drugs Standard Control Organization ("CDSCO") under the provisions of the Drugs & Cosmetics Act, 1940. CDSCO's functions include regulating the medical devices industry by approving for import, manufacture and sale of medical devices in India.

3.8 Medical Services

An institution run by a physician for a particular purpose such as a maternity home, nursing home, private hospital, rehabilitation centre or any type of training institution etc. may be advertised in the lay press, but such advertisements should not contain anything more than the name of the institution, type of patients admitted, type of training and other facilities offered and the fees. Please also see 2.7 above.

3.9 Nutritional Supplements: It is regulated under the Food Safety and Standards Act, 2006.

3.10 Occult ("Psychic") Services

These services are not legally recognized in India and are not permissible under the Drugs and Magical Remedies (Objectionable Advertisements) Act, 1954

3.11 Pharmaceuticals (over-the-counter and prescription medications)

The phrase over-the-counter (OTC) has no legal recognition in India. All the drugs not included in the list of "prescription-only drugs" are considered to be non-prescription drugs (or OTC drugs). Prescription-only drugs are those medicines that are listed in Schedules H and X of the Drug and Cosmetics Rules, 1945.

3.12 Tests and Lab Analysis

The Drugs and Cosmetic Act, 1940 prohibits advertisements for any drug or cosmetic from using reports of tests or analysis of the Central Drugs Laboratory or by a government analyst.

3.13 Political Candidates, political platforms, political parties, political issues

The Representation of the People (Amendment) Act, 1996 has the following provisions relating to advertisements:

  1. prohibit advertisements for a period of forty-eight hours ending with the hours fixed for conclusion of polling for any elections in a given polling area.
  2. use of displaying posters, signboards etc. for political advertisement in any public place strictly in accordance with the relevant provisions of the local laws.
  3. equitable opportunity to all political parties and candidates to have access to public advertisement space for election related advertisements during the election period.
  4. use of private premises for political advertisement only with the voluntary permission of the occupant.
  5. prohibition of any and all advertisements at the cost of the public exchequer regarding achievements of the political party/ruling government.

The statute provides for a penalty of imprisonment and/or fine for anyone, including advertisers, who contravenes these provisions.

3.14 Products Related to Sexuality (condoms, ED drugs, etc.)

Advertisements related to sexuality are allowed with the provision that there should not be any indecent representation of women under the Indecent Representation of Women (Prohibition) Act 1986. Products must comply with the Drugs and Cosmetic Act 1940 and other certification rules under the Cable Television Network Rules 1994.

3.15 Religion

Under the Cable Television Networks Rules 1994, Advertising Codes of Doordarshan & All India Radio and Norms for Journalist Conduct issued by the Press Council of India, advertisement based on religion or to hurt religious sentiments are not allowed. Also, such advertisement may be punishable under Indian Penal Code 1860.

3.16 Securities

The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 issued under section 30 of the Securities and Exchange Board of India Act, 1992 prohibits fraudulent or unfair trade in securities. These regulations further provide that dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves an advertisement that is misleading or contains distorted information and which may influence the decision of the investors.

3.17 Sexual Services

Advertisement pertaining to sexual services is illegal in India.

3.18 Tobacco Products (cigarettes, cigars, snuff, pipe tobacco)

Please see para 2.1 above.

3.19 Toys

There is no specific restriction on the advertisement of toys provided they are in compliance with other applicable laws.

3.20 Advertisement by Companies

The Companies Act 1956stipulates that no deposits from the general public should be accepted by public companies (other than non-banking financial companies) without issuing advertisement following the prescribed norms. The Companies Act has also specified various provisions relating to advertisement by Indian companies.

3.21 Advertisement Relating to Packaged Goods, etc.

The Standards of Weight & Measures Act, 1976 prohibits issuing advertisements otherwise than in accordance with the provisions of this law.

4. Regulations Related to Advertising Methodology

4.1 Advertising to Children (advertising during and immediately before and after children's programming)

The Young Persons (Harmful Publications) Act, 1956 prohibits advertisements relating to any harmful publication i.e., any publication that tends to corrupt a young person (person under the age of 18 years) by inciting or encouraging him or her to commit offenses or acts of violence or cruelty or in any other manner whatsoever.

According to the ASCI Code, advertisements addressed to minors shall not contain anything, whether in illustration or otherwise, which might result in their physical, mental, or moral harm or which exploits their vulnerability. For example, advertisements may not:

  • Encourage minors to enter strange places or to converse with strangers in an effort to collect coupons, wrappers, labels or the like
  • Feature dangerous or hazardous acts which are likely to encourage minors to emulate such acts in a manner which could cause harm or injury
  • Show minors using or playing with matches or any inflammable or explosive substance; or playing with or using sharp knives, guns, or mechanical or electrical appliances, the careless use of which could lead to their suffering cuts, burns, shocks, or other injury
  • Feature minors in promoting tobacco or alcohol-based products
  • Feature personalities from the field of sports, music, or cinema for products which, by law, either require a health warning in their advertising or cannot be purchased by minors.

4.2 Celebrity Endorsements

No current restrictions.

4.3 Comparative Advertising (ads that compare the advertiser's product to that of a competitor)

The provisions pertaining to comparative representation were part of "Unfair Trade Practice" under the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act). After repeal of the MRTP Act, the provisions relating to unfair trade practices were inserted in the Consumer Protection Act, 1986. However, a business entity cannot claim relief against unfair comparative advertising under the Consumer Protection Act, as a business entity is not a consumer. This can be taken up only by consumer associations, the central government, or state governments, and it does not provide protection to the business entity equal to the protection under the MRTP Act. Thus, under the existing law, a manufacturer whose goods are disparaged has no standingto seek a remedy. Presently, in the absence of any specific legislative regulating comparative advertising, disputes are decided by various courts on the basis of the facts in each case. However, ASCI code (which is made part of the Cable Television Network Rules, 1994 as well) permits advertisement containing comparisons including those where a competitor is named in the interests of vigorous competition and public enlightenment, provided:

  1. It is clear what aspects of the advertiser's product are being compared with what aspects of the competitor's product.
  2. The subject matter of comparison is not chosen in such a way as to confer an artificial advantage upon the advertiser or so as to suggest that a better bargain is offered than is truly the case.
  3. The comparisons are factual, accurate and capable of substantiation.
  4. There is no likelihood of the consumer being misled as a result of the comparison, whether about the product advertised or that with which it is compared.
  5. The advertisement does not unfairly denigrate, attack or discredit other products, advertisers or advertisements directly or by implication.

Presently, ASCI is actively taking action against any advertisements making unsubstantiated claims, exaggeration, unfair denigration in violation of ASCI Code.

4.4 Contests (games of chance and games of skill)

The Public Gambling Act, 1867 prohibits gambling activities in India. However, the Public Gambling Act permits games of mere skill.

4.5 Deceptive or Misleading Advertising

Deceptive or misleading advertisements are restricted under the various legislations including the Consumer Protection Act, 1986; Cable Television Network Rules, 1994; Norms for Journalist Conduct issued by the Press Council of India Act and ASCI Code.

4.6 Surrogate Advertising

The ASCI Code provides that advertisements of products whose advertising is prohibited or restricted by law or by the ASCI Code must not circumvent such restrictions by purporting to be advertisements for other products the advertising of which is not prohibited or restricted by law or by ASCI Code. To determine if there is an indirect advertisement of prohibited products due attention shall be given to the following:

  1. Visual content of the advertisement must depict only the product being advertised and not the prohibited or restricted product in any form or manner:
  2. The advertisement must not make any direct or indirect reference to the prohibited or restricted products
  3. The advertisement must not create any nuances or phrases promoting prohibited products
  4. The advertisement must not use particular colours and layout or presentations associated with prohibited or restricted products
  5. The advertisement must not use situations typical for promotion of prohibited or restricted products when advertising the other products.

The Cable Television Networks Rules, 1994 has also imposed similar restrictions to curb surrogate advertising.

4.7 Advertorials and Disguised Ads

The Norms for Journalist Conduct issued by the Press Council of India, Cable Television Network Rules, 1994 and Advertising Code of Doordarshan requires that advertisements must be clearly distinguishable from news content carried in the newspaper.

4.8 False Advertising

False advertisements are restricted under the various legislations including the Consumer Protection Act, 1986; Cable Television Network Rules, 1994; Norms for Journalist Conduct issued by the Press Council of India Act and ASCI Code.

4.9 "Free" Gifts/Samples

The Consumer Protection Act 1986, Section 2 (3) (a) states that (i) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole, or (ii) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest, is an unfair trade practice.

The Norms for Journalist Conduct issued by the Press Council of India has stated that gift including those given by the advertisement agencies for publication of material relating to their clients or otherwise should not be accepted by the journalist.

4.10 Free Speech (specific limitations, e.g. personal slurs, defamation, political statements)

Article 19(1)(a) of the Constitution of India protects the right to freedom of speech and expression, which is also extended to advertisements. However, like any other right, this freedom is also subject to reasonable restrictions imposed by Article 19(2) of the Constitution of India.

Furthermore, the ASCI Code states that no advertisement shall be permitted which:

  • Derides any race, caste, color, creed, or nationality
  • Tends to incite people to crime or to promote disorder and violence or intolerance
  • Presents criminality as desirable or directly or indirectly encourages people, particularly minors, to emulate it or conveys the modus operandi of any crime
  • Adversely affects friendly relations with a foreign state

To view Part 2 of this article click on 'Next Page'

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