In India, the only legal term recognised by the government is Direct Selling. After the Consumer Protection (Direct Selling) Rules 2021, words like MLM, Network Marketing, or Referral Marketing are not legal terms.
A company may use a multi-level commission structure, but the business is still legally called Direct Selling, not MLM. This is why people search for Direct Selling MLM, but in reality, only Direct Selling is permitted under Indian law.
🟢 What Makes Direct Selling Legal
Income comes from product sales, not recruitment
- No compulsory joining fees
- Refund/buyback available
- Compliant website, documents & packaging
- State-wise filings + grievance redressal
This is the legal form of a Direct Selling MLM business model.
🔴 What Makes MLM Illegal
Income comes from recruiting people
- No real product
- Forced purchases
- Guaranteed income claims
- No refund or buyback
These fall under pyramid/money circulation schemes.
🎯 Conclusion
In 2025, Direct Selling is legal, MLM as a term is not.
A compliant company can use multi-level commissions, but the correct, legal name remains Direct Selling — the safe and government-regulated version of what people casually call Direct Selling MLM.