The draft norms by the Department of Consumer Affairs propose to bring direct selling under a regulatory framework under the Consumer Protection (Direct Selling) Rules. The ministry has sought comments and suggestions from stakeholders by July 21.
Earlier in 2016, the ministry had released guidelines which were advisory in nature. The draft rules now propose penalties for violations, and include banning direct selling companies from promoting pyramid schemes or money circulation schemes.
According to the draft norms, direct selling companies have to register themselves under relevant Indian laws and with the Department for Promotion of Industry and Internal Trade (DPIIT) for allotment of a registration number, should have at least one physical location as a registered office in India, and have other provisions like appointing a nodal contact person for coordination with law enforcement agencies.
Rini Sanyal, IDSA chairperson said: “The initiation of this process has sent a positive signal to all entities, intermediaries and people associated with the industry.”
India hasn’t had clear regulations for the sector so far.
According to a 2019 report by the World Federation of Direct Selling Associations (WFDSA), in 2019, the Indian direct selling industry which comprises Amway, Oriflame and Modicare among others, reported sales of US $2.47 billion.