The ministry of electronics and information technology (MeitY) is set to exempt the film, advertising, and allied creative sectors from the 10% mandatory labelling rule in its draft deepfake regulations, official sources told Fe. This move comes after a series of consultations and feedback from stakeholders in these industries, and will provide them a much-needed reprieve. The industry had raised concerns about the impact of the proposed rule on creative freedom and production workflows.
Sources said that the final rules are expected to be notified shortly, and will signal a calibrated approach which will balance regulation of synthetic content with the practical realities of high-end media production.
Origin of the 10% rule
MeitY’s draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, were released on October 22 for public consultation. Under it synthetically generated information was for the first time being legally defined under the IT law. The core objective was to ensure transparency with clear labelling of deepfakes and other AI-generated audio, visual, and image-based content, which have grown into powerful tools of deception. The draft mandated that platforms or intermediaries distributing such synthetic material must affix a visible, permanent, and non-removable label covering at least 10% of the screen or audible segment of content, with significant social media intermediaries required to obtain declarations and deploy verification tools.
These proposals were aimed at empowering users to distinguish synthetic from authentic content easily and to hold social media platforms accountable. The government had cited increasing concerns over malicious uses of deepfakes, including defamation, impersonation, misinformation and fraud, especially involving prominent personalities. The rule was designed to prevent deceptive synthetic content from flooding the digital sphere without clear disclosure.
Film and advertising community’s protest against labelling rules
However, the film and advertising fraternity articulated objections to the 10% labelling rule, describing it as overly broad and impractical for their creative and technical environments. Industry voices had pointed out that such a blanket requirement would disrupt the viewing experience for long-form content, commercials, and VFX-intensive sequences. They had warned of visual distortion that could detract from artistic expression and brand messaging, particularly when AI is employed as a supportive tool rather than for deceptive purposes. Alternative suggestions were made, including the use of opening or closing credits and subtle disclosures akin to content ratings that would preserve artistic integrity while maintaining transparency.
Further, the expansive definition of synthetic information had led to fears of overreach. Routine post-production processes such as colour grading, voice clean-up, dubbing, and background replacements, which are AI-assisted in many cases, would have fallen under the labelling mandate, blurring the distinction between harmful deepfakes and standard industry practices. Therefore, creative stakeholders had urged a risk-based approach focusing specifically on deception and fraud, rather than sweeping regulations that could stigmatise legitimate uses of AI technology.
Concerns were also raised about the stigma the label might attach to AI-enhanced works, potentially diminishing audience perception and commercial value. Persistent on-screen AI warnings, the industry had pointed out, risked framing such content as inauthentic or lower quality, which would impact films, ads and experimental formats reliant on digital effects and innovation.
Officials said that the decision to exempt the film, advertising, and similar sectors from the 10% labelling rule, shows that a consultative process helps in finalising regulations and the government engages with the industry with an open mind.