Is India Moving To Ban All MLM Companies?

by Ted Nuyten on December 5, 2012

India MLM Banned

 

The Hindu newspaper in India has today reported on some proposed new guidelines from the Indian Government for State legislation regarding the “Prize Chits & Money Circulation Schemes” (PCMCS).

The PCMCS law is, to say the least, not clear and this lack of clarity has allowed pyramid and other scams to flourish in India.

Unfortunately, critics of the multilevel marketing business model have convinced some in India that it too should be made illegal. Incredibly, news articles even in reputable media talk about how pyramid schemes are banned around the world, and then go on to talk about companies like Amway as if they are pyramid schemes (and thus illegal everywhere).

Amway is not banned anywhere. These draft guidelines would do so, however in India -

 5. No individual or Company or firm or business association, in any form, shall run a scheme that induces enrolment of new members by offering benefits or commission, by whatever name called, to upline members in the pyramid out of the action or performance like sale or purported sale of goods or services by the downline members.

This guideline, if implemented as law, clearly would ban all multilevel marketing in India, with an outright ban on earning commissions based on sales through agents you recruit and train.

I have received a copy of the proposed guidelines as well as accompanying background notes and will be posting a series of articles over the next few days.

In the meantime, if you’re involved with network marketing in India, you need to get in contact with your local political representatives and ensure they are aware of these guidelines and the damage they’ll do to Indian enterprise and India’s reputation.

Source: David Steadson – The truth about Amway

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14 comments… read them below or add one

Abhishek December 5, 2012 at 4:02 pm
Dear Ted, I have been listening and reading these articles in leading newspapers in India since last 8 years, Nothing will be getting banned. But i would seriously like that the recent activities would lead to some kind of law which would differentiate the genuine mlm companies from the fly by night operators prevalent in India

JAY GHATAGE December 5, 2012 at 9:13 pm
Hello Ted, I have been in direct sailing from 12 years and i love this industry ,but sad to say those who are planning to ban it in INDIA do not understand the benefits that common people will get through this industry , instead of banning the industry they should see to that the law in the country is so strong that illegal company's should not be give a chance to operate . DSA or the company's who are good company's should approach the INDIAN government and make them understand the benefits of direct sailing other wise this will give a bad message globally . ALL THOSE WHO STAND FOR THE GOOD OF DIRECT SEALING should raise a voice on this issue plz lets not ignore it . TED see if you can do some thing on this

Ed Ludbrook December 6, 2012 at 7:26 am
Do not worry everyone. I have seen this for 20 years in many countries. The government is seeking to close down recruiting scams and thus our business and a few others are caught in the loop. We had the same concerns in the UK with the 1992 Pyramid Sales Regulations that I advised on implementation. I remember talking to an Irish government official about similar legislation and he said 'yes, all these recruiting schemes like MLM are closed'. So you mean $billion Amway is closed? No of course not. Its just those other illegal recruiting schemes Huh? Its not the legislation, its how they implement it that matters.

Khan December 9, 2012 at 4:18 pm
Yes True It should be Banned because it give the opportunity to a layman for quality life, but in India common Man is not allowed to have quality life. The people who make the rules and regulation for Indian they are most corrupt People (politician) who do not want prosperity for the people of Indian. I request all net workers around the Glob to raise your voice for MLM in India. We have to show our Power we love this industry and it should not be banned. Regards

jitender December 11, 2012 at 11:16 am
Hi*** Ted not to worry at all..... only ban unlegal chit fund schemes now indian central government very-very soon going to make guidelines on direct selling industry to regulate this, two states RAJASTHAN & KERLA already gives guidelines gazete. dear sir not possible to ban this industry in india becoz lakhs of public employment given by this industry, only government need to regulate this & safe public from some fraud chit fund money rotation companies....

RAMESH PATIL, HUBLI. December 12, 2012 at 4:05 pm
dear sir, if this is the case, then allllllllllllllllllll insurance companies in India must be closed where recruitment of agents or advisors, or consultants is 1000000000000000000000% compulsory including all private insurers and lic of india. Will they have the guts to do this? I doubt and it is practically impossible. Some government agencies just float a news in the media and try their best to get benefits before implementing the same.............................. and at the end they will not make the law.

Amit Kumar December 13, 2012 at 7:53 am
Hi, To all people those associated with Direct Selling industry. This is a time to keep patience because direct marketing industry in India is going through a turning phase. Undoubtedly, government cannot ignore the number of people whose making their bread and butter from this industry. Its just that now a law is strictly required and lot of work is also going on over the same. I saw FICCI and IDSA meetings with government officials, MMEF (Multilevel Marketing Employees Federation) under the banner of AITUC (All India Trade Union of Congress) rallying in Delhi, Kerala and other states. 100% things are shaping up good but would take little more time as making and implementing a new law is not an easy task. Remember: without having IRDA in place LIC has sold millions of policies and covers, BPO companies have also done their business without NASSCOM in place, initially. Similarly, last 17 years direct selling had same situation. Neither Insurance industry nor ITES industry banned so why would MLM ? This is a time to stand strong together and once law is introduced, India will also show the signs of high growth through direct selling. Thanks, Amit

chekri December 14, 2012 at 8:44 am
If that is the case... to my knowledge crores of middle class india people are involved in network marketing as a profession for a Decade or more. How many job opportunities can the government provide in the Government sector? How many job opportunities can the government provide in the Private sector? Or Can the Government show alternate opportunities millions involved in this industry? Network Marketing or Direct selling is an opportunity to earn a livelihood for a every common man.

multilevel marketing December 18, 2012 at 1:17 pm
Hai ted, You published this article at the right time. It was very helpful to understand the pitfalls in mlm. I am expecting more articles from you.

Mohammed Azeem Khan December 22, 2012 at 12:37 pm
MLM BAN in India is clarified.: Please view the link: http://www.pib.nic.in/newsite/erelease.aspx?relid=91095 Good news to all my MLM industry mates, MLM is NOT illegal in INDIA and has never been. The information is from the government owned website. MLM guidelines will soon be released. Luv MLM

Shah December 25, 2012 at 3:37 am
I can understand the frustration and concern shared here, I am also a networker , Indo-Canadian, I just wanted to share some ground realities which people outside India may not know. MLM is a great concept but some people have misused it, floated bogus companies, schemes. That has created bad name for MLM. We need to expose those to save real MLM.

POORNA CHANDRA REDDY January 30, 2013 at 10:31 am
it is not possible for the govt. many people kept their lives in this industry....instead of doing all these its better to design a legal model for the industry in India...So that fraud companies will not going to start and good companies will grow spontaneously....Don't worry banning will not happened in India ....

Ashwani Kumar February 19, 2013 at 10:43 am
The MLM concept is very good for the people who wants to rise in there life. And more over the Govt of India earns a lot of Income tax from this system. Because every networker pay a full amount of tax from his/her commision. Better than those industrialists who always try to save tax by unusual means. I salute to this wonderful system of earning.

jagadish March 9, 2013 at 5:48 am
MLM has reduced crime rate in Malaysia as the great Mahtir saw people standing under trees after 9-5 shift which led to formation of tensions in factories encouraging to disruptive activity + crime . Positive Mlm companies like Amway Conybio (also give positive spiritual training ) which give commission only on sale of products should be encouraged & companies which ask for deposit promising high interests etc should be banned as many loss face by getting into such bad companies and are forced to leave city if things go wrong , In short we need to activate the need of a product then the greed of the person ? Iam using some products of good companies like Amway Conybio and saved personally lakhs of medical bills for my family over the past 12 years . Strong deposits in crores $$ should be given by companies to Indian government for formation -so if ever they close suddenly the people who braved the sun + rain worked hard need not lose face... Proper distribution of profits should be followed... I have worked in only 1 MLM company enjoyed the free training all over the world company sponsored for 12 + years still earning commission continuously for more than 12 years . Its a great journey i am doing it part time only so no pressure ... I have decided this is the first & last company i will work with with this kind of focus sure success is assured. Study the plan jump in never never give up Its for the middle class to earn some extra income meet people enjoy life in harmony we make more friends in mlm help each other its great