India Finalises Draft Guidelines for Direct Selling

In some much needed good news, and relief for the many legitimate direct selling companies in the thriving Indian market, the Consumer Affairs Ministry has reportedly finalised draft guidelines for the direct selling industry in India.

The Times of India reports that the Ministry has finalised these draft guidelines with a view to safeguarding the interest of consumers, by differentiating genuine direct selling opportunities from money-swindling ponzi schemes.

In the next step, the draft guidelines will be sent to the Prime Minister’s Office, which will take a final call in consultation with the Cabinet Secretary.

In a meeting with industry stakeholders held in New Delhi on July 29, Consumer Affairs Minister Ram Vilas Paswan discussed the draft guidelines prepared by the inter-ministerial panel and took their final views.

“We have taken final inputs from the industry and the draft guidelines for the direct selling industry are almost in the final shape,” a senior government official said after the meeting.

The proposed guidelines clearly define legitimate direct selling and differentiates it from ponzi schemes, the official said.

It also defines the functions of direct selling companies, which will help investigating agencies to differentiate between genuine and fraudulent players, the official added.

According to sources, the draft guidelines will be notified to the public after getting clearance from the PMO.

Industry bodies FICCI, CII, Assocham, Indian Direct Selling Association and representatives from leading direct selling companies were present at the meeting.

The guidelines are being framed as the direct selling industry is facing challenges in the absence of a clear legislation that defines a regulatory framework.

Sources report that industry players have suggested to the ministry to notify the guidelines on direct selling as part of rules under the new Consumer Protection Bill, which will help give it legal sanctity.

The bill, which has been introduced in the Lok Sabha and is being vetted by the Parliamentary Standing Committee, has provisions to protect the interest of consumers buying on e-commerce and direct selling platforms.

QNET thanks the Consumer Affairs Ministry for this initiative and looks forward to a regulated environment for the direct selling industry to thrive whilst safeguarding the consumers’ interest, benefiting the society at large.