Eight states notify guidelines for monitoring direct selling entities

Eight states have notified guidelines to monitor direct selling entities after the Centre announced rules for the industry in December 2021.

The Centre’s Consumer Protection (Direct Selling) Rules, 2021 provide for monitoring by states. Each state government is required to set up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.

The Indian Direct Selling Association (IDSA) is part of the monitoring mechanism in five states already, said Rajat Banerji, chairman of IDSA.

Kerala is understood to have the most extensive guidelines. For a homogeneous framework, the IDSA is also working with the National Law School of India University, Bengaluru.

“It is for capacity building. Once it is ready we can take it to the various state governments,” Banerji said.

The eight states that have come up with guidelines include West Bengal, which ranks second after Maharashtra in terms of direct selling revenues. Roshni Sen, principal secretary, West Bengal consumer affairs department, said that her office had received more than 100 applications from direct selling entities for enrolment. (Which is the first?)

The empanelment would help the state to monitor and supervise entities. On Friday, the state also launched online enrollment for direct selling entities.

Sen said that while the state had received more than 100 applications, the IDSA had 18 members and called upon the association to bring the other companies into its fold. This would help the state government.

The Indian direct selling industry was worth Rs 19,020 crore in 2021-22. The IDSA members accounted for about 55 per cent.

According to IDSA’s survey for 2021-22, the Indian direct selling industry achieved an annual sales figure of Rs 18,067 crore.

The wellness and nutraceutical category contributed 59 per cent of direct selling sales in India, followed by 22 per cent revenue contribution by the cosmetics and personal category.

Banerji said that despite the devastation caused by the second wave of the Covid-19 in 2021-22, the direct selling industry in West Bengal had outperformed expectations in 2020-21. “We are confident that this performance level would be further enhanced in FY 2022-23.”