Demand for direct selling law; Global CEOs to visit India

The CEO Council members would be meeting various ministry officials, including those from Finance and Consumer Affairs, says IDSA Secretary General, Chavi Hemanth.

In order to push for a separate legislation for the direct selling industry in India, top global executives of such firms would be visiting the country later this year.

The CEO council of World Federation of Direct Selling Associations (WFDSA) would be coming to India for the first time.

"This is to discuss road map of direct selling industry in India and also to meet various stakeholders to put up a case for a separate legislation for the industry," Indian Direct Selling Association (IDSA) Secretary General, Chavi Hemanth, told reporters here.

She added the CEO Council members would be meeting various ministry officials, including those from Finance and Consumer Affairs, during their India visit.

Founded in 1978, WFDSA has around 60 members, including Avon, Amway and Herbalife and the CEO Council is the main governing body of the federation. IDSA is also a member of the organisation.

"We expect around 10 CEOs out from a total of 30 council members to come to India to attend the WFDSA meeting," Hemanth said.

IDSA, which represents 18 direct selling firms in India including Amway, Oriflame and Tupperware, has been seeking a separate regulatory framework for the sector in order not differentiate from any fraudulent pyramid and ponzi schemes.

Currently, the direct selling industry in India is governed under Prize Chits and Money Circulation Scheme (Banning) Act (PCMC) of 1978.

"We are talking to government to separate us from PCMC Act, which was primarily formed to check fraudulent financial pyramid and ponzi schemes," Hemanth said.

She said direct selling is a part of trade and commerce activity and not linked in anyway to financial instruments and chit funds.

Recently, top officials of Amway India, including CEO William Scott Pinckney were arrested in Kerala on charges of financial irregularities.

As per the industry sources, direct selling industry in India is pegged at around Rs 6,350 crore.