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Raids on Amazon and Flipkart Sellers: India’s Enforcement Directorate (ED) targets sellers suspected of violating foreign exchange laws.
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Foreign Investment Law Breaches: Investigation focuses on alleged breaches of foreign investment laws by e-commerce giants.
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Regulatory Challenges: Amazon and Flipkart face growing regulatory scrutiny in India.
India’s Enforcement Directorate (ED) has launched a crackdown on Amazon and Flipkart sellers, suspecting them of violating foreign exchange laws ¹. The raids, conducted in major cities like New Delhi, Mumbai, and Bengaluru, aim to investigate alleged breaches of foreign investment laws by these e-commerce giants ². This move follows a report by India’s antitrust regulator, highlighting preferential treatment to select sellers, potentially undermining competition.
The investigation centers on whether Amazon and Flipkart have maintained close control over certain sellers’ inventory, violating foreign exchange regulations ³. Indian law prohibits foreign e-commerce companies from holding inventory, mandating they only provide a platform for independent sellers. Local retailers have long accused Amazon and Flipkart of sidestepping investment rules by working closely with preferred sellers, giving them indirect control over product inventories.
Amazon and Flipkart have yet to comment on the raids, while the Enforcement Directorate remains tight-lipped about the investigation’s specifics. A 2021 investigation revealed Amazon’s significant influence over inventory and pricing of major sellers on its Indian platform ⁴.
