CAIT calls for a separate act on Direct Selling Business in retail

In an inter-ministerial meeting convened by Ministry of Consumer Affairs held recently, the CAIT has sought specified legislation to regulate Direct Selling Business in India while submitting a detailed memorandum on Direct Selling. According to CAIT, the Direct Sellers should be given facilitation to set up their plants in India for manufacturing  products, under the current Government's "Make in India” programme.

BC Bhartia, National President, CAIT and Praveen Khandelwal, Secretary General, CAIT explained, "Indian Direct Selling Industry is growing at a phenomenal rate and has a huge growth potential. More than 50% 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. The Direct Selling Business in India has grown from Rs.33 billion in 2009-2009 to Rs.72 billion in 2012-13. According to a KPMG report, the Industry will touch a turnover of Rs.64,500 crore by 2025.”

CAIT further said that as the Industry is poised for growth, it is imperative to bring Direct Selling Industry under an appropriate legislation. In the absence of any legislation, it is feared that crooks who deceit people and elope with their money may have an advantage over genuine companies engaged in Direct Selling Business.

As per the proposal coined by CAIT, Direct Selling Industry should include safeguards to protect 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 and services should be included in regulatory mechanism for direct selling industry.