Regulatory objections have not stopped surrogate advertising in India. The recent Maharashtra FDA flag against a Vimal Elaichi ad featuring Shah Rukh Khan, Ajay Devgn and Tiger Shroff is the latest reminder that restricted categories still find visibility through brand extensions, celebrity endorsements, sponsorships and digital placements.
For marketing teams, the more important question is not whether the rules exist, but why the economics keep making that risk acceptable.
A familiar playbook
For decades, brands in restricted categories such as pan masala and alcohol have used extensions—music CDs, bottled water, cardamom and men’s accessories—to keep a core identity in front of consumers. The latest objection centres on a Vimal Elaichi ad that regulators say is a surrogate promotion of pan masala and tobacco-related products.
The fact that the ad features three of Bollywood’s biggest stars shows how much the category is willing to pay for high-visibility endorsements.
Why enforcement is harder than it looks
Industry experts describe a regulatory grey zone. Kaushik Moitra, partner at Bharucha and Partners, says the framework is “complex and sometimes ambiguous,” because the line between a legitimate brand extension and a surrogate ad depends heavily on context. Even ASCI guidelines cannot automatically settle every case, and overlapping regulators slow enforcement.
Sandeep Goyal, managing director at Rediffusion, is more direct: “The law does exist – it is the wilful disdain of enforcement.”
The numbers behind the risk
The economic incentives are significant. Pan masala is a ₹48,000-crore industry in India, not a marginal advertising category. Experts estimate the segment spent around ₹500 crore on television alone during IPL 2025, with annual advertising expenditure across media crossing ₹1,000 crore.
- Estimated TV spend during IPL 2025: ₹500 crore.
- Category-wide annual ad spend across media: over ₹1,000 crore.
- Celebrity endorsement payouts: 25–50% higher than typical consumer product deals.
- CCPA penalties: generally in the ₹10–20 lakh range.
Manas Mishra, founder of Mediant, notes that in some cases the surrogate product is not a sizeable business for the brand, which invites regulatory scrutiny. At the same time, the category remains almost always dependent on celebrities, so top talent can charge more.
Contracts spread the downside
A lawyer familiar with such deals describes surrogate advertising as having a favourable risk-reward ratio, especially for pan masala. Celebrity fees can run to several crores, while regulatory penalties are comparatively modest.
The contractual chain—brand, agency, celebrity and platform—typically works on indemnifications. Each stakeholder claims to have done checks, but if something goes wrong, responsibility is passed on. The advertiser pays, agencies operate on contracts, and celebrities and platforms are indemnified. That distributes the risk enough to keep campaigns moving.
What marketing teams should watch
For marketing professionals, the implications go beyond legal exposure. Before producing or accepting work in restricted categories, teams can review whether a proposed extension has genuine product substance, re-read ASCI’s brand-extension guidance, and monitor state-level regulatory action. Celebrity contracts should clarify creative approval and indemnity boundaries, especially because recent objections show that star power draws regulator attention. For agencies, revenue pressure is real, but the reputational cost of a public notice can outlast the fee.
Source: ETBrandEquity.com
