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Tags: New Delhi , ICRIER , Direct selling

New Delhi: Direct selling business has almost doubled in the last five years and is set to grow rapidly in rural areas, an Indian Council for Research on International Economic Relations (ICRIER) report said Friday.

Despite being a relatively new sector in India, direct selling is growing at around 20 percent. The total number of direct sellers in India has almost doubled between 2004 and 2009.

"While IT and IT-enabled services have been considerably discussed areas in the service sector, the growth and employment generating potential of other services like direct selling need to be explored further," Ashwani Kumar, minister of state for planning, science and technology and parliamentary affairs, said after releasing the report here.

With over three million direct sellers in 2009, India was ranked 11th among the top direct selling countries.

Companies are spreading operations from metropolitan cities to smaller cities and even trying to explore rural markets, said the ICRIER report on "Socio-economic impact of direct selling: need for policy stimulus".

The report is being prepared in association with the Indian Selling Association and the World Federation of Direct Selling Associations.

Kumar said direct selling could be an important area of employment generation as it was a low investment and high returns sector.

"In the context of the government's aim to engage 50 crore more people in gainful employment by 2022, direct selling could play a major role," he said.

He said unlike in retail trade the direct selling companies sell directly to consumers, thus making direct selling a business-to-business and business-to-consumer operation.

The minister also emphasised on the need for a proper regulatory framework for the sector so that genuine direct selling companies could be differentiated from the fake ones and fraudulent activities could be barred.