New rules to bring clarity and provide legitimacy, say direct sellers

The government's move to notify new rules for the direct selling industry would bring more clarity and provide legitimacy, direct selling companies said on Tuesday.

The move will also help attract more foreign direct investment (FDI) and the latest technology in the sector in the coming times, they said in response to the notification of the Consumer Protection (Direct Selling) Rules, 2021.

Welcoming the move, the Indian Direct Selling Association (IDSA) which has companies like Amway, Avon, Oriflame and Modicare as members, among others, said the move would give impetus to the sector, which is providing employment to 70 lakh Indians, in which more than 50 per cent are women.

 

"We welcome the new rules. We have been providing our inputs to the government for the past two years. We support the new rules wholeheartedly," said IDSA Chairman Rajat Banerji.

Oriflame India Director, Corporate Affairs (Asia) Vivek Katoch said direct selling rules will not only protect the industry and consumers from pyramid and money circulation schemes but also provide legitimacy to direct selling business in the country.

"In the coming time we can witness Foreign Direct Investment(FDI), latest technology and competitive products in the Indian market," said Katoch, who is also Chair FICCI Direct Selling Task Force.

While Amway India CEO Anshu Budhraja said this is a "significant milestone" for the entire industry and lauded the efforts of the Government of India, especially the Ministry of Consumer Affairs in proposing rules to protect the best interest of consumers and the direct sellers at large.

"We believe clarity and consistency of policies are imperative for the growth of the direct selling industry and hence we have been engaging closely with key stakeholders," he said.

According to IDSA data, direct selling in India grew by 4.7 per cent in the first half of the pandemic-hit FY2020-21 to Rs 7,518 crore sales, aided by heightened demand for health and nutrition segment products.

In FY20, the Indian direct selling industry reported a 28.26 per cent growth in sales to Rs 16,776.2 crore.

The government on Tuesday notified the Consumer Protection (Direct Selling) Rules, 2021. The rules notified by the nodal Consumer Affairs Ministry are to be complied with by both direct selling entities and direct sellers using e-commerce platforms for sale.

The entities have to ensure compliance with the rules within 90 days.

Henceforth, the direct selling companies will also be liable for the grievances arising out of the sale of goods or services by its direct sellers.

As per the new rules, state governments will have to set up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.