The Enforcement Directorate (ED) conducted raids at the offices of certain sellers on the platforms of Amazon and Flipkart, according to government sources. The action marks a pivotal point in ongoing investigations into potential breaches of foreign direct investment (FDI) regulations by the two companies, with Flipkart being primarily owned by Walmart.
The raids follow recent findings by India’s Competition Commission (CCI), which indicated potential anti-competitive practices involving preferential treatment of select sellers by the two retail giants. The CCI’s report alleged that Amazon and Flipkart engaged in tactics that gave undue advantages to certain sellers, thus limiting the market opportunities for other businesses.
Indian regulations on FDI in the e-commerce sector specifically prohibit companies from holding inventories or offering preferential deals to selected sellers. However, brick-and-mortar retailers have long argued that Amazon and Flipkart circumvent these rules by partnering with chosen sellers who, in turn, offer products under exclusive or preferential arrangements, creating an uneven playing field.
Both companies have denied any wrongdoing, maintaining that they operate within the boundaries of Indian law.
