IDSA for clear policy framework for Direct Selling Industry in India Request to Government for Immediate Operational Clarity

In an attempt to clear-out the clouds about the operational ambiguities for Direct Selling Industry in India, the member companies of the Indian Direct Selling Industry have come together and are demanding the Government for a clear policy framework while recommending the following:

1. Immediate Operational Clarity for the Industry

2. Exclusion from PCMC Act

3. Separate Legislation

All the member companies of Indian Direct Selling Industry pledge to stand together against the continued harassment because of the collapse happening often between fraudulent financial pyramid schemes and DirectSellingcompanies. The arrest of Amway India CEO and Directors without any documentary evidence in Kerala amidst unclear reasons has not only dazed the Industry but also risked the future of lakhs of independent sales consultants i.e. Direct seller working in the DirectSellingIndustry in India.Amway India. The unfortunate incident also worries Union Corporate Affairs Minister Sachin Pilot who described the Amway arrests as a “disappointing eventuality” and commented that the government will remove as early as possible the ambiguities in laws aimed at tackling fraudulent investment schemes Amway CEO and two directors were granted bail within 24 hours.

Ms. Chavi Hemanth, Secretary General of IDSA said, “The focus of regulation should be to identify which practices are fraudulent and it should lay down certain specifications for the protection of consumers, distributors as well as DirectSelling entity.The government needs to create a conducive environment for the efficient operation of genuine DirectSelling companies and ensure that the consumers are not cheated by the fraudulent players. There is no clear and holistic definition of DirectSelling in India and as a result, the classification of DirectSelling is also not clear.”

The solution of this problem is to create a new law defining and legitimizing direct selling, registering direct sellers and clearly establishing the principle that distinguishes direct sellers from pyramid schemes. Amway, Tupperware, Oriflame, etc, are direct-selling companies that offer employment and supplemental income to millions around the world.

“We should not just focus on the DirectSelling sector as alone, but such kind of incidents will also threaten and jeopardize the investment from overseas. Recently from our Industry only, one of our membercompany has shut their business owing to the lack of clarity over the regulatory aspects. (To be contd)