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IDSA & Members Seeking Cilarity on MLM Regulations

Indian Direct Selling industry
Written by Ak Sharma

In order to get legal sanctity and recognition from both central and state government authorities, the Indian direct sellers like Tupperware, Amway, Oriflame and their association body IDSA might quickly approach the commerce ministry in coming days.

Right now direct selling sector is of Rs 7,000-crore in India with 18  companies who are promoting through direct sales are seeking the clear meaning of “direct sellers” and distinction from multi-level marketing entities, including those dealing in money circulation schemes.

On the other hand, Amway representatives in the United States are preparing to satisfy commerce minister Anand Sharma, who is presently on an official visit to United States.

“We will prepare a strategy paper and approach the commerce ministry soon. Our proposals of own set of strict guidelines for identifying real direct sellers from the rest are being studied by the finance ministry. We are hopeful that something favorable could come out in a month’s time,” Chavi Hemanth, secretary-general of the Indian Direct Selling Association stated.

Nevertheless, government sources showed that both the consumer affairs ministry and the department of financial services are against  exclusion of direct selling entities such as Tupperware, Amway and others from the ambit of Reward, Chit Funds and Money Circulation (Banning) Act, 1978. Both are presently examining the link in between illegal profitable schemes, including ponzi schemes, pyramid schemes and those promoted by the multi-level marketing companies.

Sources in the customer affairs ministry are of the view that instead of a main regulator or a main law, these direct selling entities ought to be subjected.

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