Amway India, which has been lobbying to frame laws for the direct selling industry, said it had given model guidelines from Vietnam, Singapore and Malaysia, as ready-reckoners for officials.
Richard N. Holwill, Vice-President, Public Policy, Amway Corp, said, “Our idea is to see a system that protects consumers and their interests. The Government has shown eagerness to study laws and regulations operating in several countries before framing one here.”
The direct selling industry had approached the Department of Industrial Policy and Promotion and the Ministry of Consumer Affairs seeking a regulatory framework to separate it from Ponzi schemes.
Holwill said the Government was also examining the Kerala Government’s guidelines before framing rules for direct selling. Last year, the Kerala Government had come out with guidelines, first in the country, to rein in the industry and multi-level marketing firms.
LEGAL AUTHORISATION
According to the Kerala document, all direct selling companies need to be legally authorised to conduct business and file all returns, as mandated by law. They should be permitted users of registered trademarks and maintain Web sites with details of their products, services, terms and conditions, prices and direct sellers. The guidelines discouraged any membership fee or deposits as a condition for enrolment.
Official sources, however, said that before bringing in laws for direct selling and multi-level marketing, it was essential to understand the modalities of their working.
The activities of direct selling companies are covered under the Prize Chits and Money Circulation Schemes (Banning) Act 1978.
Stating that there was legitimate business opportunity in the industry, Holwill said direct selling was an informal retail sector.
Amway is looking at doubling its turnover to Rs 2,500 crore by the end of this year from the Rs 1,407 crore. The subsidiary of the $ 8.4-billion Amway Corporation, Michigan, US, offers 15 products in five categories. Asked if the company had firmed up a location for its manufacturing facility, he said it may zero in on Tamil Nadu or Gujarat.