Is AI search quietly reshaping India’s OTC and wellness advertising?

There was a time when health “research” meant walking into the neighbourhood chemist and lowering your voice. You described symptoms in fragments. The chemist squinted, nodded gravely and reached for a strip of tablets or a syrup with a vaguely medicinal name. Authority came from proximity. Trust came from habit.

Today, the chemist has been replaced by something infinitely patient and unnervingly articulate. Instead of a counter, there is a chat window. Instead of a nod, there is a synthesised answer.

Instead of a recommendation, there is a carefully hedged paragraph that sounds clinical enough to reassure and cautious enough to protect itself. India’s OTC and wellness market is still expanding rapidly. But the gatekeeper of discovery has changed.

India’s over-the-counter and self-care drugs market was valued at roughly ₹47,000 crore in 2024 (the last confirmed rupee amount) and is projected to nearly double to ₹98,000 crore by 2030, growing at about 13 percent annually, according to EY. A significant portion of this market is digitally driven.

In wellness and preventive categories, more than half of Indian consumers prefer buying online, even as pain and chronic segments continue to lean on pharmacists. For brands in sexual health, vitamins and supplements, dermatology, weight management and immunity, search and marketplaces are not auxiliary channels. They are primary engines of discovery.

Against this backdrop, AI-led search and answer engines are beginning to alter how health information is surfaced and consumed. They are not banning categories or publicly blocking ads. 

Instead, they appear to be raising the evidentiary bar for what gets surfaced prominently in health-related queries. In doing so, AI search is emerging as a quasi-regulatory layer sitting on top of existing Indian advertising norms, platform policies and privacy law.

The formal regulatory perimeter in India is clear.

Medico-legalese

The Advertising Standards Council of India has long required that health and wellness claims be backed by credible evidence and that disclaimers cannot be used to neutralise misleading impressions.

As Manisha Kapoor, CEO and Secretary General of ASCI, explains, “Advertisements must not distort facts or mislead by implication or omission, and disclaimers cannot be used to contradict or suppress material information that would otherwise make a claim deceptive.” Compliance, in her words, is ultimately about safeguarding consumer trust in a high-volume information ecosystem.

In other words, the rules are not ambiguous. Make a claim, back it up. Use a disclaimer, but do not hide behind it. Sell responsibly.

In recent years, that ecosystem has come under scrutiny. ASCI’s 2023–24 data shows more than 8,000 ads examined, with 98 percent requiring modification and a large majority originating on digital platforms. Healthcare is consistently among the least compliant sectors, with a significant share of ads found misleading due to lack of honest representation.

Dozens of ads have been flagged under the Drugs and Magic Remedies Act through escalations to the Ministry of AYUSH, particularly around exaggerated or “magic cure” claims. Digital health and wellness, in other words, is already treated as a high-risk category by watchdogs.

Layered on top of this is the growth trajectory of the OTC and self-care market itself. EY notes that India remains under-penetrated in OTC consumption, with per capita spend far below global averages. At the same time, consumer behaviour is bifurcated.

While pain and chronic categories remain pharmacist-led, wellness products are disproportionately purchased online. If even a third of the ₹47,000 crore OTC market behaves like digital-first, discovery-led brands, that implies a ₹15,000 crore slice of the market whose growth is tightly coupled to search, marketplaces and digital visibility.

Media diagnostics

That ₹15,000 crore is not a neat line item in anyone’s balance sheet. It is an analytical slice. But it represents the part of the health economy that lives or dies on being found.

This sits within a broader advertising environment that is increasingly digital-first and algorithmically mediated.

The dentsu–e4m Digital Advertising Report 2026 projects India’s overall advertising industry to exceed ₹1.3 lakh crore by 2026–27, with digital commanding close to 70 percent of total ad spends in 2027. 

As AI and automated decisioning systems shape media planning, targeting and measurement at scale, discovery itself is becoming more machine-filtered than ever before. In that context, subtle shifts in how AI systems rank and frame health information can have disproportionate effects.

Traditional keyword-based ad systems operated largely on explicit rule sets. If a claim did not use a banned term and met formal policy requirements, it could often run with disclaimers.

AI-driven answer engines operate differently.

They synthesise information, assess context and are trained to minimise risk. Instead of asking whether a claim technically passes a rule, they evaluate whether surfacing it could expose the platform to misinformation, medical liability or privacy risk.

Machines do not read disclaimers the way humans do. They do not roll their eyes at hyperbole. They calculate probabilities.

Prognosis and discovery

The direction of travel within digital health itself reinforces this shift. Gaurav Verma, Chief Business Officer at PharmEasy, describes how AI is moving healthcare discovery from transactional comparison toward deeper interpretation.

“This marks a shift from comparison to interpretation, and from treatment to prevention,” he says, pointing out that data and pattern recognition are increasingly central to digital health engagement.

If comparison is the currency of traditional search advertising, interpretation is the grammar of AI. And interpretation favours structure, traceability and clarity.

The implication is not that compliant brands are being banned. Rather, brands that are able to demonstrate regulatory certifications, clearer product classifications and clinical-style substantiation are more likely to align with how AI systems evaluate risk.

Vague wellness language, loosely defined benefit claims and grey-zone positioning may still be technically permissible under Indian advertising norms if properly substantiated. But in a probabilistic, AI-driven ranking system optimised for safety at scale, such claims may be down-ranked or framed more cautiously.

Industry practitioners are already observing subtle shifts in how discovery behaves in high-intent health categories. Rahul Vengalil, Co-founder and CEO of tgthr, notes that AI search is most visible in segments where consumers are actively seeking solutions. “Users are searching on AI for references or AI solutions and then directly going and making a purchase, so that click is actually missing,” he says.

The missing click is not just a UX quirk. It is a redistribution of influence.

At the same time, Vengalil cautions against overstating the shift. For the majority of consumers, traditional search and broader discovery still dominate. The AI-led compression of journeys is currently concentrated among early adopters and in high-intent categories such as pharma and wellness. 

The structural impact may be narrow today, but in a fast-growing, digitally dependent segment, even a partial reallocation of visibility can have outsized consequences.

The broader policy environment explains why platforms might err on caution. India’s Digital Personal Data Protection framework treats health information as sensitive, requiring explicit consent and imposing significant compliance obligations. 

Global platform policies for healthcare and medicines have tightened in recent years, adding certification requirements and stricter enforcement layers. In a landscape where misleading health claims attract regulatory heat and privacy violations carry financial and reputational risk, AI systems trained to optimise for compliance are incentivised to over-generalise caution rather than under-enforce.

For India’s OTC and wellness brands, the result is a squeezed middle. On one end sit hard-regulated prescription categories with clear clinical pathways. On the other sit overtly non-compliant or quack claims that are increasingly easy to flag. 

In between lies a substantial cohort of semi-formal wellness brands that are legally compliant but depend on persuasive, benefit-led language and aggressive digital discovery.

In a rule-based system, such brands could compete through creative framing and disclaimer-backed positioning. In an AI-mediated system, discoverability increasingly depends on how closely their claims resemble defensible, clinical information.

This does not mean AI search is replacing ASCI or acting as a formal regulator. It does not mean ₹15,000 crore of advertising is being blocked overnight. 

What it does suggest is that AI-driven search and platform enforcement are becoming an additional, algorithmic layer of gatekeeping. 

Visibility is being reallocated toward brands that can signal certification, structure and evidence, and away from those that rely on ambiguity.

TL;DR

India’s OTC and wellness market is expanding rapidly and is deeply dependent on digital discovery. Health advertising is already under heavy scrutiny from regulators and watchdogs. 

Digital now commands the majority of ad spend, and AI systems increasingly shape what gets surfaced in that digital environment. 

In this setting, AI search engines are rationally biased toward caution. They are not loudly censoring brands. They are quietly privileging those that look most defensible. 

And in a market built on being found, that quiet shift may matter more than any headline ban ever could.