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Direct Selling Guidelines 2021 in India

Direct Selling Guidelines 2021 in India

MLM has always remained in controversy. Probably it is one of the industries having the highest scam rate.

From the last few decades, the direct selling industry has grown rapidly. Meanwhile, the number of scams has grown simultaneously.

Scam companies and fraud MLM leaders are prominent reasons behind the bad reputation of MLM.

While there is one thing that has brought a positive light to this industry is Direct Selling Guidelines 2016, especially for India.

The Indian government considered direct selling and regulations are built for a healthy business environment.

Here we are going to share with you the major highlights of Direct Selling Guidelines 2016 and Direct Selling Rules 2021. Therefore you can understand, what are basic norms for doing direct selling business in India.

Direct Selling Guidelines 2016

The direct Selling Industry comes under the Ministry of consumer affairs, Food & public distribution, and the Department of consumer affairs.

After the year 2000, there was a rapid growth of MLM companies in India. Many local and international companies targeted common Indians for the distribution and marketing of their products using different MLM compensation models.

But till the end of this decade, there were lots of conflicts in the industry.

Pretending as MLM, many fraud pyramid schemes and ponzi schemes fooled people by doing money circulation.

While greedy people promoted these fraud schemes to make quick money. Cheap motivation and show-off become vital marketing tools of MLM leaders and companies. MLM fraud was at its peak.

People as well as the government were confused with the legality of MLM in India.

On 9, September 2016 the government finally launched Direct Selling Guidelines for the first time.

Guidelines are different from laws and consist of rules to be followed. Direct Selling Guidelines 2016 was an advisory for the state government to facilitate and create their own state direct selling guidelines.

Now, most states follow the same advisory with some changes.

Like Maharashtra state direct selling guidelines prohibited the use of online services and digital goods such as hosting, cryptocurrencies, e-wallet as products in the direct selling business.

The Direct Selling entities should not deal with following products or service:-

Here are some other major highlights of Direct Selling Guidelines 2016.

For Companies

To get affordable and powerful MLM software you can opt for a trusted product like Ventaforce. It provides an e-commerce store, public website, admin dashboard everything in one place. So you don’t need to worry about the technical aspect of your MLM Company.

For Direct Sellers

Direct Selling Rules 2021

After Direct Selling Guidelines 2016, Direct Selling Rules 2021 is another breakthrough in the MLM industry.

Direct Selling Rules 2021 are not issued yet. Ministry of Consumer Affairs published the first draft on 30, June 2021. Direct selling rules gazette will be published in the future.

Department asked citizens to give comments and suggestions on the draft of direct selling rules 2021 before 21, July 2021 by doing mail on ca@nic.in.

To a large extent, new rules are much similar to direct selling guidelines 2016. The major highlight of Direct Selling Rules 2021 is as follows

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