ED Cracks Down on E-commerce Giants for Foreign Investment Violations

The Enforcement Directorate (ED) has conducted searches on key vendors of Amazon and Flipkart amidst a foreign investment violation investigation under FEMA. The investigation follows complaints about alleged FDI rule breaches, influencing sale prices, and unfair competition. The Confederation of All India Traders (CAIT) has welcomed this action.

The Enforcement Directorate (ED) launched an investigation against key vendors linked to e-commerce behemoths Amazon and Flipkart on Thursday over suspected foreign investment violations. The probe spans 19 locations, including Delhi, Gurugram, and Bengaluru, scrutinizing potential breaches of India's Foreign Direct Investment (FDI) rules.

This scrutiny emerges amid allegations that these firms have been manipulating product prices and stifling fair competition, contrary to local trading practices. In light of these developments, the Confederation of All India Traders (CAIT) lauded the ED's intervention, reinforcing long-standing concerns about such market behaviors.

Praveen Khandelwal, CAIT Secretary General, referenced past penalty notices from the Competition Commission of India (CCI) against Amazon and Flipkart for similar anti-competitive actions. Meanwhile, calls from other trade organizations, urging immediate operational suspensions, underscore the gravity of the alleged predatory practices impacting small retailers and economic equity.

(With inputs from agencies.)