Maharashtra to frame monitoring rules for direct-selling firms amid rising consumer complaints

Maharashtra government forms a committee to regulate direct-selling firms, aiming to create guidelines for monitoring online sales and addressing consumer complaints.

MUMBAI: The Maharashtra government has moved to regulate the fast-growing direct-selling sector, setting up a committee to draft guidelines for monitoring companies that operate outside traditional retail channels and largely sell online. A government resolution to this effect was issued by the state food and civil supplies department on Thursday.

Maharashtra to frame monitoring rules for direct-selling firms amid rising consumer complaints

Direct selling has surged in recent years, with hundreds of firms, and thousands of individual sellers, conducting business through online platforms. Apart from standalone direct-selling firms, major e-commerce marketplaces such as Amazon, Flipkart and Myntra have also enabled individuals to run small independent businesses.

But senior officials say the state currently has no framework to keep track of such companies or address consumer complaints effectively.

“From the government side, there is no monitoring happening of such companies. Not only this, the state government does not have a guideline to monitor these companies. The same was discussed in a meeting of the food and civil supplies department held on October 8 following which the decision for formation of a committee was taken,” said a senior official from the food and civil supplies department.

Under the new plan, a five-member committee, headed by the deputy secretary of the food and civil supplies department, will draft the proposed framework. Its members include the controller of the department of legal metrology, the secretary of the India Direct Selling Association, and the under secretary and desk officer of the food and civil supplies department.

According to the government resolution, “The panel will conduct a thorough study of the laws and guidelines regarding direct selling in other states. Accordingly, prepare laws and guidelines for monitoring and supervision of direct selling companies and direct sellers, which will be uniform in the entire state.”

Officials say misleading product claims and unverifiable corporate details have become a recurring concern.

“The companies sell their products by making big claims but many times it turns out to be false and consumers feel cheated. Even if they complain against the company we have no information about these companies. We don’t know the number of these companies, are they registered or not, where are they registered among other basic details,” explained another official.

While the department currently lacks the authority to take punitive action, officials say they at least require a system to verify company details and respond appropriately when complaints surface.

Once prepared, the committee’s recommendations will be submitted to a seven-member high-level panel headed by the secretary of the food and civil supplies department, which will finalise the guidelines.

The committee, constituted in January 2023 but unable to make significant progress, includes senior officials from finance, industries, GST, the state crime branch, legal metrology and an external expert.