Earlier this month, the Athletics Federation of India (AFI) released a circular aimed at altering the commercial landscape for athletes and coaches affiliated with the organization. The directive, signed by the Acting Secretary G Srinibas Patnaik, requires athletes to secure “prior approval from the Athletics Federation of India before entering into any agreement or contractual arrangement with a sponsor or third party.”

In addition, sponsors are mandated to inform the AFI that “the athlete has received the necessary approval.” The federation promises to “confirm the request within three days of its submission.”

The reasoning provided for this new rule is protective in nature, as the circular highlights “increasing instances of athletes and coaches frequently switching sponsors” and presents the measure as essential to “protect the interests of both athletes and sponsors.”

In light of the backlash on social media platform X, the AFI clarified that the circular aims to “prioritize athletes” and ensure “clarity in contracts.” They also stated that their legal team would analyze agreements to shield athletes from possible complications. Below is an overview of the circular and the subsequent debate it has sparked.

Traditionally, sponsorships for Indian athletes have been managed through private negotiations. “Athletes generally engaged in endorsement contracts independently or with agents, facing only event-specific limitations — such as conflicts with national kits or federation sponsors during competitions. Commercial independence was primarily retained by the athlete,” explained Gaurav Saxena, an Advocate at the Bombay High Court and founder of BetterRep Sports.

Previous restrictions were minimal and not imposed by the AFI. They stemmed from participation agreements linked to international events, blackout periods during major competitions like the Olympic Games, during which individual sponsorships are prohibited, and a designated timeframe ahead of events to safeguard Olympic sponsors from ambush marketing.

Sports lawyer Abhinav Shrivastava, a partner at LawNK Partners, indicated that the only restrictions usually included in participation agreements were related to preventing personal sponsors from exercising their rights while the athlete competed in global athletic events. However, he noted that nothing as extensive or restrictive as the current circular had been established, requiring AFI’s approval for personal sponsorships.

This new circular represents a shift in control, extending beyond competition periods into the daily commercial activities of athletes, making federation approval a prerequisite for every contract. What was previously an occasional restriction has transformed into ongoing oversight.

AFI’s justification appears to focus on protection. Saxena remarked that this decision seems to be “driven by athletes frequently changing sponsors and entering disadvantageous agreements,” but he also cautioned that it is being “framed as a protective measure for athletes.”

The process of implementing this circular has attracted criticism. “There is no public evidence of prior consultation with stakeholders such as athletes, agents, or representatives. The circular seems to have been issued unilaterally,” he noted.

Critics of the circular raise a fundamental legal question: is it within a sports federation’s authority to regulate private contracts? “The circular itself does not offer any legal or statutory justification… there is no legal foundation for the wording of the circular,” stated Advocate Shivam Singh, Of-Counsel at Chamber 20A.

This lack of legal backing is significant since the AFI does not function as a statutory regulator. Its authority is derived from its affiliation with and recognition by World Athletics as the Indian National Federation. “Its powers do not extend beyond that,” Singh emphasized, characterizing it as a private entity overseeing the sport rather than the contracts of the participants.

If a legal challenge arises, it is likely to hinge on this distinction. Section 27 of the Indian Contract Act of 1872 voids agreements that restrict lawful trade. “This represents a restraint of trade curated by the AFI,” Singh argued, asserting that the circular interferes with both athletes’ and sponsors’ rights to negotiate freely.

Article 19(1)(g) of the Constitution guarantees citizens the freedom “to practice any profession, or to carry on any occupation, trade, or business,” but Article 19(2) allows for “reasonable restrictions” on this right for the sake of national sovereignty, public order, or preventing incitement to commit an offense.

Experts believe the AFI may struggle to frame the circular within this context. Any limitations on an athlete’s ability to engage in sponsorship agreements would need to pass the tests of reasonableness and proportionality — criteria that the current measure, in its broad scope, may not meet.

Shrivastava contextualizes the issue within a broader spectrum of cases involving sports organizations. “What an athlete does by utilizing their personal brand and image is exercise their right to capitalize on their persona and earn a living from their sport, which conflicts with a blanket approval requirement. Such an obstruction also diminishes the athlete’s capacity to cultivate their own brand, as sponsors may be reluctant to invest in long-term strategies if each renewal and the terms of each sponsorship require AFI review and approval,” he noted.

Additionally, courts have regarded such federations as entities performing public functions, evaluating their decisions against principles of constitutional fairness and overreach.

The immediate impacts of this rule may vary, but the structural changes are evident. For seasoned athletes, the necessity of approval may prolong negotiations, while for those on the fringes, it might determine whether sponsorship deals are even possible.