Crackdown on E-Commerce Giants: Amazon and Flipkart Under Scrutiny

India's financial crime agency has raided Amazon and Flipkart sellers' offices, investigating foreign investment rule violations. The raids follow antitrust findings against these firms for favoring select sellers, with India's enforcement agency probing compliance with foreign exchange laws. The case underscores ongoing regulatory challenges for e-commerce giants in India.

India's financial crime agency has intensified its investigation into alleged foreign investment rule violations by conducting raids on sellers of Amazon and Walmart-owned Flipkart. This development follows recent findings by the country's antitrust body, which accused the e-commerce platforms of favoring a select group of sellers.

The raids took place in major cities like New Delhi, Mumbai, and Bengaluru, as part of an ongoing probe by the Enforcement Directorate into potential breaches of foreign exchange laws. These regulatory actions have significant implications for Amazon and Flipkart, both of which consider India a vital market with rapidly growing e-commerce sales.

Antitrust investigations revealed that the platforms exerted considerable control over inventory, contradicting Indian prohibitions against foreign entities holding inventory directly. Concerns about predatory pricing have also been raised, pointing to broader issues with foreign investment practices in India's dynamic e-commerce sector.

(With inputs from agencies.)