Greenwashing happens when companies make exaggerated or deceptive claims about the environmental benefits of their products, services, or policies, which tricks well-meaning consumers and diverts essential funding away from businesses that are genuinely eco-friendly. This research paper examines the core concept of greenwashing, its harmful impacts on consumer trust and sustainable development, and the current legal tools India uses to combat it—including consumer protection laws, ASCI advertising guidelines, and disclosure rules established by financial regulators like SEBI and the RBI. By critically evaluating these frameworks alongside landmark court decisions, the research reveals significant gaps, such as ambiguous legal standards, a lack of mandatory third-party verification, and overlapping, disconnected regulatory oversight. Ultimately, the paper demonstrates that India's current anti-greenwashing measures are overly reactive and fragmented, arguing for a streamlined, cross-sectoral regulatory authority with strong enforcement powers, mandatory independent audits, and strict legal penalties to ensure corporate transparency and protect market integrity.