Legislative regulation of MLM business in India

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Network marketing in India is recognized as a completely legal business model. However, to maintain a favorable market environment, protect consumer rights and avoid fraudulent financial pyramids, the MLM industry is strictly regulated by state legislation.

The Indian Direct Selling Association, which was created by Amway India, Modicare, Tupperware India and other leading market players, also operates in the country. Its main goals are to promote the industry, control network marketing activities in India and prevent illegal forms of MLM. IDSA has developed a whole code of ethics that all MLM companies must follow.

In 2021, the Consumer Protection Department issued new direct selling rules. According to the rule, all online companies in India must:

register your business with the Department for Promotion of Industry student data and Internal Trade (DPIIT);

keep records of all your products, attracted partners and clients;

issue distributors with identification cards confirming their registration with the company;

have your own website with information about the company's policies, terms of cooperation and lending, products and terms of their return, contact information;

develop a system for reviewing and resolving complaints;

Provide partners with a clear compensation plan, fixed commission amounts and rewards.