ED has raided the offices of several sellers operating on Amazon and Flipkart.
The raids were carried out across New Delhi, Mumbai, and Bengaluru.
The ongoing probe focuses on whether these platforms have violated foreign investment laws.
India’s financial crime agency, the Enforcement Directorate (ED), has raided the offices of several sellers operating on Amazon and Flipkart in connection with an investigation into potential violations of foreign investment rules. The raids were carried out across New Delhi, Mumbai, and Bengaluru.
The raids come after India’s antitrust body found that Amazon and Flipkart had violated competition laws by giving preferential treatment to select sellers on their platforms, reports Reuters. Both Amazon and Flipkart have maintained that they comply with Indian regulations.
The ongoing probe focuses on whether these platforms, which are both crucial to India’s fast-growing e-commerce market, have bypassed foreign investment laws. According to these regulations, companies like Amazon and Flipkart are only allowed to operate as online marketplaces, not as direct sellers of goods.
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The ED is particularly looking into whether these platforms indirectly control inventory and manipulate prices to benefit certain sellers. This would be a violation of foreign investment policies, which tightly regulate multi-brand retail operations in the country.
A government source explained that the raids were part of a broader investigation into foreign exchange violations. The source also added that 19 locations in India were being raided, though the names of the sellers being targeted have not been disclosed.
The investigation has been ongoing for years, with Amazon and Flipkart facing scrutiny over allegations that they have bypassed foreign investment laws. Antitrust investigation reports from August suggest that the two companies “had end-to-end control over the inventory and the sellers are just name lending enterprises.”
In response to these issues, India’s Commerce Minister publicly criticised Amazon in August, saying the company’s investments in the country were often used to offset business losses. The Minister added that these losses “smell of predatory pricing.”
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Ayushi Jain
Tech news writer by day, BGMI player by night. Combining my passion for tech and gaming to bring you the latest in both worlds. View Full Profile
