Raids Intensify: Amazon and Flipkart Under Scrutiny in India

India's financial crime agency raided Amazon and Flipkart sellers for alleged foreign investment violations. This follows an antitrust report suggesting they favored select sellers. The raids, conducted across 19 locations, probe possible indirect influence on pricing, challenging compliance with Indian regulations.

India's financial crime enforcement agency raided the offices of sellers linked to Amazon and Walmart's Flipkart. This operation is part of an investigation into alleged breaches of foreign investment regulations, according to three government sources on Thursday. The raids follow a report by India's antitrust body that highlighted competition law violations by the two major e-commerce platforms.

The enforcement actions represent another hurdle for Amazon and Flipkart in India, a pivotal market for their e-commerce ventures. With raids occurring in New Delhi, Mumbai, and Bengaluru, details about the specific sellers targeted remain undisclosed, according to a senior government official.

The Enforcement Directorate is probing whether these platforms indirectly influenced the pricing of goods, contrary to Indian law, and failed to offer a level playing field for all sellers involved. Past investigations suggested that Amazon and Flipkart exerted considerable control over some sellers' inventories, with claims dating back to August alleging they engaged in 'predatory pricing.' Amazon and Flipkart have yet to comment, while the financial crime agency also withheld remarks.

(With inputs from agencies.)