Recently, the Enforcement Directorate (ED) conducted a raid on 19 premises of the main sellers of Amazon and Flipkart. The names of the vendors are yet to be revealed. These raids were administered in Delhi, Bengaluru, Mumbai, Hyderabad, and Panchkula of Haryana.
Multiple complaints were received about both e-commerce platforms violating India’s FDI (Foreign Direct Investment) rules by directly or indirectly influencing goods’ sale prices. As a result, the ED decided to start its investigation under the Foreign Exchange Management Act (FEMA) provision.
An official shared, “On the basis of complaints, ED made multiple teams and decided to conduct raids after coordinating on Thursday morning.” It was also clarified that investigations took place on premises linked to the main sellers of Flipkart and Amazon, not on the e-commerce companies.
According to sources, around a month before this investigation, the antitrust body CCI (Competition Commission of India) also shared information about this incident. The CCI said that Amazon and Flipkart are using anti-competitive practices to favour selected sellers on the platforms.
ED tried to contact both companies, but they didn’t share any comment on the matter. Meanwhile, the (CAIT) Confederation of All India Traders welcomed the ED action. CAIT secretary general and BJP MP Praveen Khandelwal stated, “The CAIT, along with several other trade bodies, has been raising these issues for the past few years.”
Praveen Khandelwal also shared that CCI penalised both e-commerce platforms and their selected sellers for using anti-competitive practices. These practices adversely affect small traders and Kirana stores.
