Direct selling companies stopped from charging entry fees from India agents

India is set to stop direct selling companies such as Amway, Oriflame from charging entry fee from agents or compelling them to buy back unsold stocks.

According to the new guidelines of the Union Ministry of Consumer Affairs, firms will have to provide complete refund or buy back guarantee of products sold to agents.

The count of direct sellers in the country has grown twice from 2004 to 2009.

Under a report of Indian Council for Research on International Economic Relations, India stood at 11th in terms of the number of direct sellers in 2009-10.

Currently, agents need to pay registration fee as well as purchase some products for selling. If they fail to sell the products, it imposes burden on them.

All companies involved with direct selling will have to comply with the new norms within three months.

States have been notified about the guidelines.