The Government of India’s Ministry of Consumer Affairs, Food and Public Distribution has issued the Draft Consumer Protection (Direct Selling) Rules 2021, which follows the spirit of the 2016 Direct Selling Guidelines. This is indeed very positive news for the Indian direct selling industry and we thank the ministry and all stakeholders for these rules, which will be a big addition to the enhancement and progress of the industry, says Mr Gautam Bali, Chairman, Direct Marketing Committee, PHD Chambers of Commerce and Industry.
The direct selling industry is one such industry in India, which has invited intense and wide-ranging discussion among policymakers, economists and the general public in the last 25 years. It has been a long journey for India’s fledging direct selling industry which is among the global top 15 and worths $2.47 billion. The new Draft Rules, when finalised will help immensely in helping the industry to grow. The industry has been consistently helping people to become self-reliant, by upgrading their skills and by promoting the concept of Make in India for a self-reliant India.
These new Rules are very instrumental in voicing the duties of the Direct Selling Entity. They protect both consumer and direct selling entity’s rights, especially with the appointment of a compliance officer by the companies as per the draft rules, there will be a win-win situation for both consumers and the sellers.
Clause 4 Point C; Duties of Direct Selling Entities
“As per the Consumer protection rule the direct seller entity should own, hold, or be the licensee of a trademark, service mark or any other identification mark identifying the direct selling entity with the goods to be sold or supplied or services to be rendered and shall not give commissions, bonus or incentives on sale of products/service for which they are not the owner, holder, licensee of a trademark, service mark or any other identification mark which identifies the entity with the goods to be sold or supplied or services to be rendered of other brands.”
Furthermore, the above-stated rules, i.e. Clause 4 point C, is something we should intricately delve into, discuss and also seek clarification as this can affect the business growth of the industry.
Though the Draft Rules are progressive in nature, however, they do not safeguard the direct selling industry from the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
The Draft Rules provide legitimacy to the Indian Direct Selling Entities as they will have to be registered with the Department for Promotion of Industry and Internal Trade (DPIIT) which will pave a progressive way forward for the industry in coming up with the future separate law.
