Multi-level Marketing (NETWORK MARKETING) company Amway, which distributes its items through contacts with ordinary people, instead of through stores and superstores, is under the government’s scanner. The issue is whether the American giant, and numerous other companies like it, serve as a Ponzi scheme, each distributor getting rewards including more representatives to the network
The government’s Foreign Investment Promotion Board (FIPB) is now trying to figure out whether to eliminate Amway’s permission to operate in India. That is unnecessary, for a number of reasons. Amway is not the only NETWORK MARKETING business in India. There are numerous others, including some domestic players over which FIPB has no jurisdiction.
Ceasing Amway from doing business will certainly not protect against some other member from providing incentives to suppliers to hire other representatives. In any case, it makes no sense to prohibit economic task when it is legitimate. India is now struggling to draw in overseas direct financial investments, to balance its expanding trade deficit. In that climate, prohibiting companies and disrupting financial investment movements is a bad concept.
For NETWORK MARKETING business, the government ought to provide clear standards about exactly what make up genuine business practices, which produce economic advantages and exactly what is simply a method of rolling over stock and earnings by roping in more representatives, in a pyramid scheme. Enforced correctly, such guidelines will help create a flourishing market for Indian and foreign MLM companies.