Deepfake Technology and India’s Digital Economy: Regulatory Challenges to Financial Stability, Consumer Trust and Cyber Law Enforcement

Abstract

This research study adopts an analytical approach to study the legal and economic aspects of deepfake technology in Indian online economy. It examines the relationship between cyber fraud facilitated by deepfakes, digital financial infrastructures, regulatory initiatives and preparedness of institutions. The referred data been collated from various sources such as government reports, publications from RBI, cybercrime statistics, industry studies and global research on AI-led schemes. The report revealed that India’s fast-paced digitisation has outstripped the preparedness of rules and made all elements of the country’s banking, digital payment, electoral system, e-commerce and social media ecosystems vulnerable. The drawbacks of deepfake technology undermines the consumer trust, increases transaction risks and compliance costs, and decreases the credibility of evidence in cyber investigations. Existing rules such as the Information Technology Act, 2000, the Bharatiya Nyaya Sanhita, 2023, Digital Personal Data Protection Act, 2023, and RBI cybersecurity regulations offer piecemeal safeguards but do not create comprehensive governance frameworks tailored specifically for AI. The study explores the policy recommendations including the statutory regulation of synthetic media, mandatory AI watermarking, digital identity verification, public awareness efforts, the creation of specialised cyber forensic infrastructure and mechanisms for international cooperation.