1. BRADLEY
ASSOCIATES REF
CODE 85230 09036BA
http://www.thehindubusinessline.com/industry-and-economy/call-for-more-clarity-on-direct-selling-in-fdi-
policy/article4756784.ece

2. Call for more clarity on direct selling
in FDI policy
The Indian arm of US-based direct selling firm, Amway, has
asked the Department of Industrial Policy and Promotion (DIPP) to
clearly define multi-level marketing and direct selling in the
consolidated foreign direct investment (FDI) policy so that there is no
confusion on the legality of foreign companies operating in India in
the sector. The Indian Direct Selling Association, that represents 18
direct selling companies including Amway, Oriflame and
Tupperware, has also made a representation to the DIPP, on the issue.
The policy talks about various forms of selling, including wholesale,
single-brand retail and multi-brand retail, but is silent on direct
selling, which is often used synonymously with multi-level
marketing.
http://www.thehindubusinessline.com/industry-and-economy/call-for-more-clarity-on-direct-selling-in-fdi-
policy/article4756784.ece

3. The companies are seeking clarity, as they do not want to be held guilty
for violation of Foreign Exchange Management Act rules and other
fraudulent activities. “Amway and some other direct selling companies
want that direct selling should also be bracketed under retail, defined
clearly and included in the FDI policy. They want their operations to be
100 per cent legalised,” a DIPP official told Business Line. When
Amway started its operations in India in the late nineties, the FDI policy
was not well established and it was not really clear under what category
they were operating, the official added. Direct sellers are also seeking to
distinguish direct selling from multi-level marketing. Amway, when
contacted, denied having made a representation to the Government but
added that representations were made by IDSA.
http://www.thehindubusinessline.com/industry-and-economy/call-for-more-clarity-on-direct-selling-in-fdi-
policy/article4756784.ece

4. “Whenever there is a financial scam of any sort, regulators are quick to
include multi-level marketers into this list, as there is an assumption
that direct sellers are MLMs. We are a direct selling FMCG. Multi-
level marketing needs to be defined. Direct selling needs to be
defined,” Rajat Banerji, Head, Corporate Affairs, Amway India, said.
Meanwhile, Chavi Hemanth, Secretary General, IDSA, said the body
had approached DIPP about two years ago, as it was not clear whether
direct selling polices came under the Foreign Investment Promotion
Board or DIPP. Hemanth said IDSA had also submitted draft
legislation for the direct selling industry to the Ministries concerned,
including Consumer Affairs, Corporate Affairs and Finance.
http://www.thehindubusinessline.com/industry-and-economy/call-for-more-clarity-on-direct-selling-in-fdi-
policy/article4756784.ece

5. The draft is based on the direct selling laws prevalent in
countries including Singapore, Malaysia, Vietnam, Hong Kong, the US,
the UK and Japan. In multi-level marketing companies, a sales person
gets paid not only for what he sells directly to consumers but also on
sales made by the members he recruits as his down line. In some cases,
a pyramid structure is created where a distributor gets paid for
recruiting another member in the scheme without any sale of products.
The direct selling industry had reported a turnover of Rs 6,385 crore for
2011-12 registering a 22 per cent growth over last year.
http://www.thehindubusinessline.com/industry-and-economy/call-for-more-clarity-on-direct-selling-in-fdi-
policy/article4756784.ece