India is a country with a diverse culture and significant economic potential. It is here that manufacturing, trade and services flourish at an incredible pace, providing a favorable environment for the development of MLM businesses. In this article we have explored the trends of the economy and the MLM market in India, legislative regulation and the peculiarities of conducting network businesses.

 

Features of the Indian economy

India is the seventh-largest country in the world by area located in South Asia. It is a developing agrarian-industrial state. Over the past few years, the country has become a leader in terms of economic growth rate. Today, its economy ranks 5th among all countries in the world and 2nd among developing countries.

The basis of such growth is several leading sectors of the Indian economy. Previously, agriculture accounted for about half of the country's GDP, but today it is only 18.8%. There is active development in the industrial, trade and service sectors. The chemical industry and pharmaceuticals are highly developed in the country.

According to the results of 2022, India's GDP grew by 6.8% and reached 3468.6 billion dollars. Its share in the global GDP is 3.28%. At the same time, GDP per capita is still below the global average. In 2022, it increased by 8.1% to 2465.9 dollars.

A distinctive feature of the Indian economy is its cheap labor force, attributed to its large population. In terms of population, the country has surpassed China and holds the first place in the world. Additionally, the country is characterized by having the youngest population.

At the beginning of 2023, the country's population stood at 1.43 billion people. Approximately 45% of the population is below the age of 25, which requires the search for additional job opportunities and opens up numerous possibilities for MLM development in India.

To prevent the rise of poverty and increase employment opportunities, the government is incentivizing foreign investments and creating favorable business conditions. Support programs and simplified business systems are in place for small and medium-sized enterprises. In 2020, the country reached a record high of $64 billion in foreign direct investments. It is expected that India will become one of the leading economic powers in the next 10 years. All of these factors present significant opportunities for MLM in India.

 

 

Trends of the network market in India

The history of network marketing in India began in 1995 when the corporation Oriflame entered the country's market. At that time, the local population did not yet understand how this business worked and the market was developing very slowly. However, in 2016, there was a significant leap forward and the profitability of the industry almost doubled compared to 2011. Since then, direct selling companies in India have been expanding actively serving hundreds of thousands of customers.

According to the Direct Selling Association of India the MLM market's profit grew to $1.7 billion in 2021.

The government recognizes the benefits of network marketing for the country's economy and supports the development of the direct selling industry. The 100% foreign direct investment policy, Digital India and Make in India initiatives are contributing to the emergence of new companies.

Over the past few years the Indian network market has experienced significant growth and has made a contribution to the economy. Today there are over 50 network companies operating in the country, involving more than 7 million people. It is expected that by 2025 MLM revenue in India will reach $9.2 billion. The rapid expansion is also driven by new trends of the network market, including:

  • Digital transformation. The adoption of online platforms and social media has made conducting business in India easier. The "Digital India" program aims to provide widespread internet connectivity even in rural areas and achieve overall digitization of the country within the next 5 years. This opens up new avenues for expanding network structures.

  • Distribution in rural areas. The majority of India's population consists of rural residents, some of whom migrate to cities in search of a better life. However, finding good employment without specialized skills is challenging. This phenomenon contributes to the active involvement of the rural population in network marketing where no prior experience is required.

  • New quality requirements. Indians with high purchasing power have started to prefer organic products. To attract such customers, MLM companies in India are heavily emphasizing the eco-friendliness of their products and their manufacturing methods. 20-40% of Indians are vegetarians, which is why dietary supplements, beverages and vegan food products are gaining popularity in the network market.

  • Women empowerment. Indian society adheres to traditional norms where women are primarily engaged in household duties rather than work outside the home. However, women aspire to develop themselves and become independent. Network marketing in India provides them with such an opportunity. Local women are willing to work hard to achieve their desired goals. Over 60% of the country's distributors are women and this figure is increasing.

 

Regulatory framework of MLM business in India

Network marketing is recognized as a legitimate business model in the country. However, various fraudulent financial pyramids still exist in the MLM market in India. Precautionary measures are being taken to maintain a favorable market environment, protect consumer rights and eliminate fraud in the country.

The Direct Selling Association of India (IDSA) was established by companies like Amway India, Modicare, Tupperware India and other leading organizations. Its main objectives are to promote the industry, regulate the activities of network marketing and prevent illegal forms of MLM. IDSA has developed a comprehensive code of ethics that all network marketing enterprises must adhere to.

In 2021 the Department of Consumer Affairs issued new rules for direct selling. Companies are required to make adjustments to their business processes to comply with all the adopted standards within 90 days from the registration date. According to this directive all MLM companies in India must:

  • to register their operations with the Department for Promotion of Industry and Internal Trade (DPIIT);

  • to maintain records of all their products, recruited partners, and customers;

  • to issue identity certificates to distributors confirming their registration with the company;

  • to have their own website with information about the company's policies, terms of collaboration and remuneration, products and their return policies, contact details;

  • to establish a system for handling and resolving complaints;

  • to provide partners with a clear compensation plan, fixed commission amounts, and rewards.

When registering MLM businesses in the country, it is important to consider the requirements of the Bureau of Indian Standards (BIS). According to these requirements there are over 74 categories of products that require mandatory certification. These categories include food products, various dietary supplements, pharmaceutical and cosmetic products, household chemicals. To produce such products in India, a special license is required and for sales certificates of conformity to standards are needed.

India is a developing country with the largest population and workforce potential. The government's flexible policies support high-level economic development. Clear regulations for MLM businesses in India make it easy to distinguish legitimate companies from fraudulent ones and mandatory certification confirms the quality of products. This increases the trust of the local population in MLM, leading to higher rates of attracting new customers and partners.

Network marketing is becoming an integral part of the country's economy. The MLM market in India is a promising location for growth and business success.

The development of a network company in India requires the optimization of all processes in accordance with the trends and rules of MLM in the country. The FlawlessMLM team has years of experience in launching network projects and can help materialize your business idea or enhance an existing company. Follow the link https://flawlessmlm.com/mlm_consulting and leave a request for our manager to contact you.