The raids are related to an investigation into the companies' alleged violations of foreign investment rules, Reuters reported.
India's financial crime agency has raided offices of some sellers operating on Amazon and Walmart-owned Flipkart in an investigation into alleged violations of foreign investment rules, three government sources said on Thursday.
The searches come weeks after Reuters reported India's antitrust body had found the two companies and their sellers violated competition laws by giving preference to select sellers on their platforms. Both companies have maintained they comply with Indian laws.
The pan-India raid included searches at Amazon and Flipkart seller locations in Delhi, Mumbai, Hyderabad, and Bengaluru. A government source said the raids were being conducted at 19 locations in India, and the agency was investigating how e-commerce platforms indirectly influence the sale price of goods, in violation of Indian laws, and do not provide a level playing field for all sellers.
The Enforcement Directorate agency has been investigating both e-commerce giants for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.
Meanwhile, 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,”
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 the e-commerce platforms and their “preferred” sellers for engaging in anti-competitive practices that have adversely affected small traders and kirana stores.
The CAIT and mainline mobile retailers’ association AIMRA had also petitioned the CCI in the past, seeking immediate suspension of operations of the platforms, alleging that the companies were engaged in predatory pricing and burning cash to offer heavy discounts on products.
Source: Reuters, The Indian Express
