India Looks to Enact Direct Selling Legislation
Aug. 6 – Reports today in The Hindu indicate that India is set to beef up its direct selling legislation in order to further support and develop the industry.
The Indian Direct Selling Association (IDSA) has urged the government to formulate a regulatory framework so that the true potential of the sector can be realized. “Growing at 13 per cent annually, a definition of direct selling as a legitimate distribution and marketing model will ensure transparency and can accelerate the growth rate manifold,” said IDSA Chairman Fredrik Widell.
Mr. Widell pointed out that the direct selling business is likely to double its size to half a billion dollars in the next three years considering India’s huge population base. “The growing concern of increasing number of fraudulent schemes and fly-by-night companies makes the demand for a proper legislation all the more pressing. This will not only protect the interest of legitimate direct selling companies but also that of the consumers at large,” he said.
The 15-member IDSA body is the Indian chapter of the Washington, DC-based World Federation of Direct Selling Associations, which regulates, strengthens and promotes direct selling – the arketing and selling products to the customers directly free from any retail points – in over 59 countries.
According to IDSA Secretary General Chavi Hemanth, they are now working with the Indian government to form a policy framework for direct selling, in line with the international laws prevalent in the West.
“The tightening up of the regulatory authority in India in direct selling is a welcome signal that the government both recognizes the importance of the industry, but also intends to protect individuals who are self employed via direct selling,” said Chris Devonshire-Ellis, managing partner for Dezan Shira & Associates India. “This will have a positive effect on the sector and is welcome news to foreign and Indian investors who take the development of this sector seriously.”
At present, the Indian direct selling market from the foreign investment perspective is dominated by Amway, Tupperware and Avon. More details on these businesses in India can be found here.