ED Conducts Raids Across Cities On Sellers Of E-Commerce Platforms Amazon, Flipkart

The ED said that it is conducting searches under Foreign Exchange Management Act at 19 premises located in Delhi, Bengaluru, Mumbai, Hyderabad and Panchkula at main vendors of Amazon and Flipkart.

The Enforcement Directorate on Thursday conducted searches against vendors operating on e-commerce platforms Amazon and Flipkart  across cities, including Delhi, Bengaluru and Mumbai.

 

The probe agency said that it is conducting searches under Foreign Exchange Management Act (FEMA) at 19 premises located in Delhi, Bengaluru, Mumbai, Hyderabad and Panchkula in Haryana against some of the main vendors operating on platforms of e-commerce giants.

 

The ED initiated its FEMA investigation based on several complaints against Amazon and Flipkart. The probe agency inspected documents and took copies of some from the premises of about six such vendors who were not named, according to news agency PTI. 

 

The probe ageny said that the entities on the e-commerce platforms violated the FDI (foreign direct investment) rules by directly or indirectly influencing the sale price of goods or services and not providing level playing field for all the vendors.

 

The report quoting sources said that a probe was launched under the provisions of FEMA after it received several complaints against the two large e-commerce companies where it is alleged that they were violating the FDI rules by directly or indirectly influencing the sale price of goods or services and not providing level playing field for all the vendors.

 

There has been no immediate response from the two e-commerce companies. The Confederation of All India Traders (CAIT) welcomed the ED action. The CAIT, along with several other trade bodies, has been raising these issues for the past few years.

 

"I welcome the Enforcement Directorate's actions as a step in the right direction," CAIT secretary general and BJP MP from Delhi Praveen Khandelwal said in a statement. He claimed that the Competition Commission of India (CCI) had also issued penalty notices to Amazon and Flipkart, and their preferred sellers, for engaging in anti-competitive practices that have adversely affected small traders and 'kirana' (grocery) stores.

 

As per existing rules, 100 per cent FDI is allowed through automatic route in the marketplace model of e-commerce. But overseas investment is not permitted in an inventory-based model.