Is multi level marketing illegal in India

IN INDIA THERE IS NO SPECIAL ACT FOR MLM .MLM IS THE COCEPT FOR SELLING PRODUCTS BY USING THIS CONCEPT FOR SELLING PRODUCT IS NOT ILLEGAL.

IF THE OBJECT / ACTIVITIES ARE AGAINSNT LAW IT IS ILLEGAL

Govt has failed to regulate MLM's and time share marketing. There is a lot of cheating,misrepresentation,hidden facts and those looking for bright time r lured in to and their pockets are emptied. 

All consumer bodies are also lethargic and no one has riden to occassion. 

Alok 

MLM is no illegal.

Dear Mr. Yadav,

Thanks for clearing my doubt.

Dear Mr. Tholiya.

What is wrong with MLM, isn't it a new way for marketing products or creating dedicated cosumers. why are we as a nation  so averse to change, that we don't want to think outside the box. We also have to realise that where ever there are human beings cheating and misuse is order of the day, human being is designed that way. Take any industry or profession how many people can say they are following all the rules in the book. Govt should recognise this industry too and lay down certain guidlines so that cheating and misuse is minimal. Every company is spending crores to have loyal consumers by way of advt and market research to beat competition and they are not very successful at that, so MLM is one such medium to create those loyal consumers. At the end of the day  the aim of every company is to earn profits.  

Dear Mr. Purshottam

How would you define Illegal in terms of MLM ? I am trying to understand Govt's stand against this, I find it a very interesting and innovative way of creating customer loyalty.

Dear Mr. Shah,

Thanks for clearing my doubts.

MLM IS NOT A NEW CONCEPT AT ALL .I MAY RECOLLECT THAT  THIS ORGANISED (CHEATING ) IS IN VOGUE IN INDIA IN THIS OR THAT FORM  SINCE MY CHIELDHOOD I.E. 1971-72.

Dear Mr. Sharma,

How can we generalise. if it was only cheating then how do you explain Amway and RMP, My Video Talk existing for more than a decade, Amway has been around for 25 years now. RMP has been around for 20 years and MVT for good 10 years, the ones which closed down like speakasia was because of the interference of people who were not part of the business, so you can't generalise, we has to open our mind like parachute to be able to see a wider perspective. I think we Indians are too conditioned to the cocept of work hard, if working hard produced results then all the donkeys would enjoy a better life but they don't. So we need to change our thinking with the times. 

What you are saying has substance and we should avoid generalisation. Some people(unfortunately it also includes some advocates) are confusing the concept of MLM with the misuse of concept of MLM by ponzi schemes and fly by night companies. Many reputed and well established companies having traditional marketing channels are in addition, also employing MLM to boost their sales.

Use of MLM by any company is perfectly legal so long the company does not violate any existing law. The replies by Adv. R.K. Yadav, Adv. Pushottam Kanchandani and Adv. Shailesh Kr. Shah are perfect.

Dear Sir,

selling health insurance under mlm, is it legal? 

SO LONG AS THERE ARE STUPID AND GREEDY  PEOPLE ON THIS EARTH THE BUSINESS OF  CHEATING WILL DO CONTINUE AND FLOURISH. YOU SHOULD DIFFERENTIATE BETWEEN MORAL STANDARD AND LEGAL STANDARAD . SOME THING IMMORALE MAY BE LEGAL OR ILLEGAL(BY VIRTUE OF EXISTENCE OR ABSENCE OF LAW) BUT YOU CAN'T CONVERT IT TO MORAL OR ETHICAL. FOR INSTANCE SPECULATION IN SHARES AND COMMODITIES MAY BE LEGALISED BY OPENING EXCHANGES FOR GOVT REVENUE PURPOSES BUT STILL THE IMPACT ON SOCIETY AS YOU ARE SEEING IS IMMORAL- PRICE ESCALATIONS. WHERE THE TRADER OR ANY PERSON ( FOR SERVICE) RECORING MONEY DISPROPORTIONATE TO THE VALUE OF COMMODITY OR SERVICE THAT IS NOT THE REAL CHARGE OR PROFIT BUT THAT IS CALLED AS "PROFITEERING" IN THE LANGAUAGE OF ECONOMICS. THE CONTINUANCE FOR A LONG PERIOD IS NOT A PROOF OF GOODNESS OR CHEATPROOF. POLITICAL PARTIES IN INDIA HAVE BEEN CHEATING THE PUBLIC FOR 64 YEARS AND YET SURVIVING. IS NOT IT CORRECT? LIFE INSURANCE IN INDIA FACES A MEAGRE 01.50% RISKS YET  SHOWS YOU DREADFUL DREAMS AND TRAP PEOPLE. IF THE INSURANCE IS LICENCED THAT MAY BE LEGAL ON STAUTORY FRONT BUT STILL IT IS IMMORAL AND A PURE CHEATING WHERE THE STAFF GETS UPTO 35-40% OF EARLIER PREMIUM. THERE ARE TWO STANTARDS FOR INSURANCE THROUGH  AGENT AND DIRECT. TELECOM COMPANIES ARE  ALSO CHEATING IN INDIA ( FOR WANT OF PROPER LEGISLATIVE MACHINERY) BY CHARGING FOR VALUE ADDED SERVICES WITHOUT DEMAND. IN AMERIKA THERE IS  A SEPARATE LEGISLATION TELEPHONE CONSUMERS PROTECTION ACT, IN UK CONSUMER PROTECTION ACT INCLUDE ADULTERATION AND WEIGHT AND MEASURES MATTERS AND CONSEQUENCES ARE CRIMINAL AND COMPENSATORY MEASURES. BUT IN INDIA THE ADULTERATION AND WEIGHT AND MEASURES MATTERS CAN BE INFLICTED BY GOVT ONLY. PLEASE THINK GLOBALLY AND LIBERALLY. THANKS! 

If the MLM concept is used to promote money circulation, which in most cases is done, such concept is illegal. Eg, when the product's cost is either too low or high, and the idea behind the concept is to only generate money in form of circulation, by the process of member enroling member and no productive/value addition is done in the process or the first few members stand to gain considerably at the expense of many, such schemes are illegal. 

Before joining any such schemes it is better to analyse the concept and check whether it will result in loss to many and gain to few.