Mumbai: Welcoming the Indian government’s initiative to amend the laws governing the direct selling business, QNET has called for setting up a regulator to govern the business.

“There are misconceptions about the overall industry and it’s easy to be brushed off or tarnished under the Prize Chits and Money Circulation Schemes (Banning) Act,” Mr Zaheer Merchant, International Director of Corporate Affairs for QNET, said.

“The need of the hour is to formulate clear cut laws to govern the MLM and direct selling industry in India which has been generating large scale self-employment and contributing to the exchequer,” he said.

Referring to reports that the Indian government has set up an Inter Ministerial Group to look into the functioning of MLM business, Mr Merchant said: “fast growing economies such as Thailand, Malaysia, Indonesia, Vietnam, Taiwan and Singapore all have a specific statute that regulate, and more important, facilitate direct selling.”

“We are confident that the government will consider all relevant legislation from other countries in reaching a fair and just conclusion and legislation here, so ensure equity and business interests are best served. We are happy to assist in any way we can, as I am sure will others in the industry or other industry bodies in other legislated markets. A specific regulator, like an ombudsman, for instance, would also be useful in matters of mediation or review,” he said.

Globally, Direct Selling is an approximately US$154 billion industry with more than 91 million people involved it as distributors of a wide range of products and services. The socio-economic impact of this industry is well documented in many countries especially in promoting self-employment and reducing the educated unemployment.

Mr. Merchant said direct selling may be lucrative, but it is also a tough business. “Right from the start, genuine businesses will tell you that the results happen only if you put in the time and effort. “

“Any company that promises you an easy way to riches should be regarded with caution. QNET for example, has a detailed earnings disclaimer available on its website and marketing materials,” he said.

Pyramid or Ponzi schemes, he said, have no legitimate products or services. “Good direct selling companies dedicate substantial resources to research and development to create quality products that are of actual use or value to people. QNET offers more than 30 different products under nine different product categories.

“Serious direct selling companies don’t allow pure recruitment for income or simply reward early participation”, Merchant explained.

It is in this context that India would be best served with clear-cut laws to govern the genuine direct selling business and not to simply enjoin it under the Prize Chits and Money Circulation Schemes (Banning) Act, he added.