The ED raided offices of some of the sellers registered with Amazon and Flipkart on Thursday
The search operations were carried out in relation to a probe into alleged violations of the Foreign Exchange Management Act (FEMA)
The raids were carried out in offices of select sellers in New Delhi, Mumbai, Gurugram, Hyderabad and Bengaluru
Amid the regulatory scrutiny of ecommerce platforms operating in the country, the Enforcement Directorate (ED) reportedly raided offices of some of the sellers registered with Amazon and Flipkart on Thursday (November 7).
The search operations were carried out in relation to a probe into alleged violations of the Foreign Exchange Management Act (FEMA), Reuters reported.
The raids were carried out in offices of select sellers in New Delhi, Mumbai and Bengaluru, Reuters reported citing ED officials. However, news agency PTI said that the raids were also conducted in Gurugram and Hyderabad.
The ED has tightened its noose around Amazon and Flipkart over alleged financial transactions done by “preferred” vendors and sellers on their platforms.
“The raids on sellers of Amazon and Flipkart is a part of ED’s probe … for alleged violations of foreign exchange laws,” a government official told Reuters.
Inc42 has reached out to Flipkart and Amazon seeking further information about the ED’s raids. The story will be updated on receiving a response.
The development comes months after it was reported that the Competition Commission of India (CCI) found both Amazon and Flipkart in violation of the country’s competition laws by giving preference to select sellers on their website.
Reports then said that the antitrust watchdog had directed the companies to turn in their recent financial statements to decide the exact penalties that it would levy.
The actions against the ecommerce players come amidst mounting pressure on the central government to keep their operations in check. On September 14, the Confederation of All India Traders’ (CAIT) Praveen Khandelwal urged the government to “suspend” the operations of Amazon and Flipkart as their practices “greatly damage” the country’s manufacturing sector. He also called for stricter regulations of such players to prevent breaches of fair competition laws.
Despite the mounting pressure, Amazon and Flipkart continue to see growth in business due to the increasing penetration of ecommerce. For instance, Amazon said it saw 140 Cr total customer visits during its recent annual festive sale, the Amazon Great Indian Festival 2024. For Flipkart, the engagement tally during the festive season stood at 720 Cr visits in 2024.
