Government considering regulation for direct selling: Official

NEW DELHI: The government is actively considering setting up a regulatory framework for ' direct selling' in order to protect consumers from fraudulent players, a senior official said today.

"We will formulate regulations and guidelines for the direct selling industry to ensure that consumer interest is taken care of and they are protected," Department of Consumer Affairs Joint Secretary Manoj Parida told reporters here.

He, however, said there was no immediate need for any regulation.

The government department will engage with other ministries like Commerce and Industry Ministry and Finance Ministry for the same, he said.

Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location.

When asked about the timeline he said: "The intent is serious but right now we are at a stage when more people have to be made aware of direct selling in India, however, there is no any immediate need for a regulation," he said.

Parida was speaking on the sidelines of an event organised by the Indian Direct Selling Association of India (IDSA).

IDSA is an autonomous, self regulatory body for the direct selling sector in the country. The Association works closely with the government on policy issues and enhancing efficiency.

IDSA, that has been demanding a regulatory framework for a long time, feels that absence government control has resulted in mushrooming of many fraudulent schemes masquerading as genuine direct selling opportunities.

According to the survey released by IDSA and PHD Chamber today, the total size of the direct selling industry in India was estimated at Rs 5,230 crore in 2010-11, with a growth of 27 per cent compared to the previous year.

It is expected to reach Rs 10,840 crore by 2014-15, it said.

"The industry is slated to grow at an average of more than 20 per cent in the next four years," it said.

IDSA's member list includes 18 global and Indian companies like Amway, Avon, HUL, Jafra Ruchi Cosmetics, Oriflame and Tupperware.