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AI companions are simulating human intimacy, serving as a friend, therapist and romantic partner. Across the globe, character-role-play platforms (such as Janitor AI, Chai AI and Crushon AI) alongside personal companion apps (such as Character.AI, Replika, Kindroid, Nomi AI and Inflection’s Pi) have rapidly expanded into the most personal spaces of human life.

This boom is particularly visible in India, which accounts for 6.02% of total global web traffic to Character.AI, making it the platform’s second-largest user base after the United States. Yet, as millions of users engage with conversational agents, legal frameworks worldwide are struggling to regulate them. The core issue is an ontological classification crisis: an AI companion is neither a standard digital product, nor clearly declared a traditional digital service, nor a passive intermediary.

Because companion apps exist in this regulatory grey zone, existing legal frameworks – from privacy statutes and mental health laws to IT intermediary guidelines – are fundamentally insufficient to address the psychological, emotional and social harms they present.

The classification void: Why current laws fail

Existing jurisprudence relies on rigid legal definitions to enforce accountability:

Not a product (product liability law): Standard consumer product liability applies to physical goods or software embedded within hardware. Standalone cloud software that dynamically generates conversational text in real time falls outside traditional product liability standards.

Not a clinical service (health and wellness law): AI companion apps consistently market themselves as “wellness” or “lifestyle” tools rather than medical devices or healthcare providers. This allows them to bypass health ministry regulations, clinical trial mandates and oversight from bodies like India’s Central Drugs Standard Control Organisation (CDSCO).

Not a passive intermediary (IT and content law): India’s IT Act traditionally protects platforms under “safe harbour” provisions if they merely host third-party content. However, as the Indian ministry of electronics and information technology (MeitY) clarified regarding the IT Intermediary Guidelines and Digital Media Ethics Code Amendment Rules 2026, generative AI........

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