New Delhi: The direct selling industry in India, with the right policy stimulus, has the potential to reach Rs.64,500 crore in revenue by 2025, according to a joint study by industry body Federation of Indian Chambers of Commerce and Industry (Ficci) and consulting firm KPMG.

The study, released on Tuesday, estimated the revenue of the industry at Rs.7,500 crore in 2013-14 with companies like Amway, Tupperware and Oriflame selling to consumers through a non-store retail format. Direct selling in India accounts for just about 0.4% of all retail sales.

According to the Ficci-KPMG report titled ‘Direct selling: Mapping the industry across Indian states’, north India will continue to be the largest market for the industry, followed by south India. North generated a revenue of Rs.2,200 crore in 2013-14 and the south Rs.1,900 crore. The northern states grew fastest at around 14% during the year.

Other states where the industry grew strong during the past five years include Assam, Delhi, Punjab and West Bengal.

The market has grown to become a key channel for distribution of goods and services in the country, especially for health and wellness products, cosmetics, consumer durables, water purifiers and vacuum cleaners, added the report.

Releasing the report, Amitabh Kant, secretary, department of industrial policy and promotion, ministry of commerce and industry, said his department has submitted draft guidelines for the direct selling industry to the consumer affairs ministry, which is the nodal authority for legislation on direct selling and state-level implementation.

Kant said direct selling should not be mixed up with fraudulent financial schemes and should get proper legislation. “Government needs to be made literate about issues regarding direct selling,” he added.

According to Rajat Wahi, partner, management consulting, head (consumer, retail and agri sector) at consulting firm KPMG in India, the government needs to amend the Price Chits and Money Circulation Scheme (PCMCS) Act, formulate standard operating procedures, and bring state-specific guidelines. The industry needs a clear definition, he added.

Last month, traders’ lobby Confederation of All India Traders (CAIT) asked the government to formulate a separate law to regulate and monitor direct selling businesses in India. CAIT said direct selling is a source of self-employment and should be regarded as a vertical of retail trade like e-commerce.