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Direct Selling

DIRECT SELLING IN INDIA

Direct selling is permitted as per Indian laws. All Direct Selling businesses come under the purview of the Price Chits Money Circulation Scheme (Banning) Act administered by the Department of Financial Services. The Ministry of Consumer Affairs has issued an advisory to State Governments /Union Territories on Model Guidelines on Direct Selling in 2016.

Is a license required to undertake Direct Selling in India?

No particular license is required to carry on Direct Selling business in India. However, a Direct Selling entity has to ensure compliance as per the conditions of the model guidelines.

Authority that issues the license

There is no licensing authority. The relevant authority which deals with the issues related to Direct Selling is the Department of Consumer Affairs, Government of India.

Are there any guidelines for Direct Selling in India?

The Ministry of Consumer Affairs has issued an advisory to State Governments /Union Territories on Model Guidelines on Direct Selling in 2016.

Penalty for breach of guidelines

The Ministry of Consumer Affairs has issued an advisory to State Governments /Union Territories on Model Guidelines on Direct Selling and not the direct selling guideline itself. Therefore, the penalty for breach of guidelines depends upon the State guidelines, if issued by the State.

Who can undertake Direct Selling in India?

A Direct Seller is a person appointed or authorized, directly or indirectly, by a Direct Selling Entity through a legally enforceable written contract to undertake Direct Selling business on principal to principal basis.

Submitting a Declaration

Any entity conducting direct selling activities shall submit an undertaking to the Department of Consumer Affairs (GOI), stating that it is in compliance with these guidelines and shall also provide details of its business. The declaration has to be made in the prescribed format to the Department of Consumer Affairs (GOI).

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