Recalibrating Intermediary Liability: India’s Draft Second Amendment to the IT Rules, 2026

India's approach to regulating digital intermediaries has never been static. It has evolved in discrete, accelerating steps, incrementally seeking to address various internet governance aspects through the route of intermediary regulation. The Draft Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Second Amendment Rules, 2026 (‘Draft Second Amendment’) is also a consequential step in that direction. 

The IT Rules, 2021, replaced the previous framework with a tiered compliance architecture, imposing heightened obligations on Significant Social Media Intermediaries (‘SSMIs’) and establishing a three-tier grievance mechanism. However, rapid expansion in the use of Generative AI tools has posed yet another challenge for the rules to mount. While certain advisories issued by the Ministry of Electronics and Information Technology (‘MEITY’) aimed to address such aspects, they lacked statutory force and were not enforced thoroughly. 

The First Amendment and ASCI’s draft

The First Amendment to the IT Rules, notified on 10 February 2026, responded with targeted measures, including the following: 

• Mandatory labelling of Synthetically Generated Information (‘SGI’) at the point of upload; 
• User self-declaration obligation; and 
• Compressed takedown timelines. 

Such labelling requirements posed practical challenges for platforms, considering the scale of uploads as well as limitations on tackling further dissemination of the said SGI. In line with the labelling requirements and other obligations, Advertising Standards Council of India (‘ASCI’) also adopted its Draft Guidelines for Responsible Labelling of SGI in Advertising dated 8 May 2026 (‘ASCI Draft Guidelines’), which proposed a risk-tied tiered mechanism:

• High Risk: At the highest tier sits prohibited content like fabricated endorsements, deepfakes, exaggerated product results, and AI-generated authority figures implying false expertise. Such content violates the ASCI Code regardless of whether an AI label is applied. 
• Medium Risk: The middle tier mandates labelling where AI use materially influences consumer decisions, covering synthetic influencers, replicated likenesses or voices, AI-generated product visuals, realistic synthetic settings, unbuilt product models, core-feature sound effects, and sponsored AI suggestions. 
• Low Risk: At the lowest tier, minor enhancements, decorative elements, fantastical imagery, and administrative AI uses require no disclosure. This is a deliberate exclusion designed to prevent consumer label fatigue and preserve the signal value of disclosure for cases where it genuinely matters.

Cometh the Second Amendment

While the First Amendment was a targeted response to a specific technological challenge, the Draft Second Amendment is structural in nature. The changes proposed by way of the Draft Second Amendment are far-reaching in nature and have implications on platform accountability in a much broader perspective than the existing IT Rules. Some of these key changes proposed include:

1. compliance with clarifications, advisories, orders, guidance, directions, SOPs or codes of practice issued by MEITY to be a requirement for ‘due diligence’ and links non-compliance with loss of safe harbor protection for intermediaries;
2. intermediaries to comply with content deletion directions while retaining certain user-related and grievance-linked information for a minimum period of 180 days, in addition to any other statutory data retention obligations applicable to such intermediaries;
3. expansion of the operation of the Inter-Departmental Committee (‘IDC’), issuance of directions and content blocking provisions, to all users beyond publishers of online news and current affairs content; and
4. expands the ambit of matters handled by the IDC, to include any matters referred to it by other departments within its fold, making the IDC function beyond a ‘classic’ grievance redressal body.

Conclusion

The Draft Second Amendment marks a clear shift toward tighter, more centralized regulation of digital intermediaries, significantly raising compliance expectations and legal risk. By tying even non-statutory guidance and advisories to safe harbor protection, it compels businesses to adopt continuous, rather than static, compliance frameworks. The expanded scope of the Rules is likely to bring a much wider range of platforms, including AI-driven services, under scrutiny. Notably, the inclusion of user-generated news and current affairs content within the regulatory fold signals a move toward broader accountability, extending regulatory oversight beyond traditional publishers to individual users and platform intermediaries alike.

While the timeline for responding to suggestions has elapsed, it is awaited to see how the Draft Second Amendment and its feedback would be received and responded to by the Government, and the timeline in which this Draft Second Amendment may be brought into effect by the Government. 

[The article is written by Data Privacy and TMT Team at Lakshmikumaran & Sridharan Attorneys]