The Confederation of All India Traders (CAIT) has sought a separate legislation to regulate and monitor direct selling business in the country.
The Indian direct selling industry is growing at a phenomenal rate and has a huge growth potential.
More than 50 per cent distributors engaged in direct selling business are household women and in this way, the direct selling business is promoting women empowerment in the country to a distinct level, said CAIT national secretary general Praveen Khandelwal.
CAIT in a a letter to Union minister for consumer affairs, food and public distribution Ram Vilas Paswan said, Since the direct selling industry is poised for growth, it is imperative to bring it under an appropriate legislation. The legislation should include safeguards to protect the interest of industry as well as consumers.
Parameters like minimum capital/equity invested, investment in manufacturing plant, physical infrastructure to provide sales, training and grievance related support, mandatory legal enforceable contract with distributors, transparent disclosures by a direct selling company for its products & services should be included in regulatory mechanism for direct selling industry.
Rajat Banerji, chairman, Indian Direct Selling Association (IDSA) said, This industry offers self-employment to over five million Indians – 60 per cent direct sellers are women. Virtually, all direct selling companies make in India.
But like all emerging forms of products distribution (such as e-commerce), there are some operational challenges for this industry which can be addressed by regulatory clarifications such as guidelines or indeed legislation for this industry.
Several countries, like Malaysia, Hong Kong, Singapore, UK have legislations in place for this industry, and we believe that the true potential of this industry will be realized, once there is legislation in place that protects consumers, direct sellers as well as direct selling entities.
The direct selling business in the country has grown from Rs 3300 crore in 2009-2009 to Rs 7200 crore in 2012-13. According to a KPMG report, the industry will touch a turnover of Rs 64,500 crore by 2025. As per KPMG projections, direct selling would generates taxes of around Rs 9000 crore by 20125, engaging 18.1 million direct sellers of which 10.6 million are projected to be women.