Deloitte-FICCI report flags governance gaps as consumer firms scale AI-led commerce, influencer campaigns and personalised customer engagement.
India’s consumer companies need clearer rules for the use of artificial intelligence (AI) in areas such as personalised pricing, recommendation engines, automated customer engagement and AI-generated advertising as digital commerce expands, according to a Deloitte India-FICCI report.
The report Consumer trends IGNITEing growth and governance, released on August 4, has called for a principle-based AI governance framework for FMCG, retail and e-commerce companies, with sector-specific guidance for high-impact use cases.
AI is increasingly becoming a core business operations layer for consumer companies, powering customer engagement, product innovation, demand forecasting, merchandising and supply chain optimisation. However, as businesses use AI to influence consumer decisions, the report said regulatory clarity around accountability, transparency and oversight will become critical.
“As AI becomes integral to FMCG, e-commerce and retail through personalised recommendations, automated customer engagement, pricing algorithms, content generation and supply chain optimisation, the regulatory framework should evolve to provide clear, technology-neutral principles rather than extending legacy regulations to emerging use cases,”
the report said.
The report recommended clearer thresholds for AI risk classification, corresponding compliance obligations and stronger standards around disclosure, traceability and auditability of AI-generated content.
“Transparency must be operationalised, not just stated,” the report said, adding that companies should establish structured processes for content review, risk classification, substantiation and appropriate disclosures.
Businesses to remain accountable for AI outcomes
The report said responsibility for AI-driven consumer outcomes would largely rest with the businesses deploying these systems rather than only technology providers.
Consumer companies using AI for recommendation engines, dynamic pricing tools, customer service bots, automated merchandising and advertising would need clear ownership structures, human oversight and escalation mechanisms.
The report recommended that organisations establish AI governance frameworks covering model reliability, bias management, explainability, performance monitoring and human accountability.
It said governance structures should include stakeholders from business, technology, legal, compliance and risk functions to ensure AI systems remain aligned with consumer protection principles and business objectives.
The report also highlighted the importance of strengthening data foundations, saying high-quality data, privacy safeguards and access controls would become key differentiators as AI adoption expands.
Companies would need to improve data architecture, standardise information systems and strengthen cybersecurity measures to build reliable AI capabilities.
Influencer marketing enters a compliance challenge
Alongside AI adoption, the report highlighted the growing influence of creator-led marketing and the need for stronger oversight of influencer advertising.
India’s influencer marketing industry is estimated at Rs 3,000-3,500 crore in 2025 and is projected to reach Rs 4,500-5,000 crore by 2027, driven by increased adoption by FMCG and e-commerce brands.
The report said social media has become a critical marketing channel as consumers increasingly rely on product trends, peer reviews and influencer recommendations before making purchase decisions.
However, it warned that the decentralised nature of influencer marketing creates new compliance challenges, with creators increasingly acting as extensions of brands while remaining independent content producers.
Citing a 2025 ASCI report, the report noted that 69 percent of India’s top influencers failed to meet disclosure requirements under the ASCI Guidelines for Influencers Advertising in Digital Media, 2023 and CCPA guidelines.
It said 56.8 percent of violations related to missing disclosure labels, while 43.2 percent involved disclosures being hidden within hashtags rather than being prominently displayed.
The report recommended stronger governance measures, including continuous digital monitoring, enhanced claim substantiation and clearer contractual responsibilities between brands, agencies and influencers.
Companies should ensure influencers do not make unsupported product claims, particularly in categories involving health, nutrition, beauty and sustainability.
AI adds new risks to digital advertising
The report said the rise of AI-generated marketing content is adding another layer of complexity for consumer companies.
AI tools are increasingly being used to create promotional copy, product descriptions, synthetic visuals, personalised advertisements and localised consumer communication at scale.
While these tools improve speed and efficiency, the report warned they could also increase risks around inaccurate product claims, exaggerated performance statements and unauthorised health or sustainability claims.
It recommended that all AI-generated consumer-facing content involving product representations undergo legal and regulatory review before publication.
The report also urged companies to strengthen oversight of third-party AI providers by assessing data provenance, training practices and legal risks.
Privacy to become a competitive advantage
The report said data protection would become central to consumer trust as companies increasingly rely on customer information to power AI-led experiences.
The Digital Personal Data Protection Act is expected to reshape how businesses collect, process and safeguard personal data, requiring stronger consent mechanisms, cybersecurity controls and breach response systems.
For large e-commerce platforms handling significant volumes of personal information, privacy will become a board-level responsibility.
Platforms classified as Significant Data Fiduciaries may face additional obligations, including appointing India-resident Data Protection Officers, conducting audits and undertaking Data Protection Impact Assessments.
The report said businesses should view privacy not only as a regulatory obligation but as a competitive differentiator.
“The retail sector may move away from a data maximisation approach towards a trust-based model, where transparent data practices and ethical use of personal information become central to brand value,”
it said.
AI to reshape India’s $1.9 trillion consumer economy
The report said the convergence of AI, digital commerce and changing consumer expectations will reshape India’s consumer sector, which is expected to approach $1.9 trillion by 2030.
“India’s consumer economy is expected to approach US$1.9 trillion by 2030, opening up substantial opportunities for businesses that can respond to rapidly evolving consumer expectations and changing market dynamics,”
said Anand Ramanathan, Partner & Consumer Industry Leader, Deloitte India.
“Growth will increasingly be shaped by how effectively organisations use AI, build resilient operations, participate in connected commerce ecosystems and translate consumer insights into differentiated experiences.”
The report said India’s e-commerce market is projected to reach nearly $260 billion by 2030, while quick commerce is expected to grow to $50 billion, creating significant opportunities for AI-led personalisation and automation.
Jyoti Vij, Director General, FICCI, said policy frameworks would play an important role in ensuring innovation while protecting consumers.
“The transformation of India’s consumer economy is creating opportunities that span businesses, consumers and the wider economy. As the sector continues to evolve, policy frameworks will play an increasingly important role in enabling innovation, safeguarding consumer interests and supporting sustainable growth,”
Vij said.
The report concluded that businesses that combine AI adoption with strong governance, transparency and accountability will be better positioned to build consumer trust as digital commerce evolves.
Source: Moneycontrol
