ED Raids Amazon, Flipkart Sellers Over Alleged FEMA Violations

The Enforcement Directorate (ED) on Thursday conducted searches under the Foreign Exchange Management Act (FEMA) at 19 premises of main vendors of ecommerce giants Amazon and Flipkart across multiple cities, including Delhi, Bengaluru, Mumbai, Hyderabad, and Panchkula (Haryana). The raids are still underway as part of an ongoing investigation initiated by the ED after receiving several complaints against the Amazon and Flipkart companies.

The allegations suggest that Amazon and Flipkart, through their marketplace platforms, are violating Foreign Direct Investment (FDI) rules, said the federal agency. As per the agency, Amazon and Flipkart are accused of directly or indirectly influencing the sale prices of goods and services, and not providing a level playing field for all vendors.

The Central agency said that its investigation is focused on determining the extent of these alleged violations. "ED initiated its FEMA investigation based on several complaints against Amazon and Flipkart. The ecommerce entities providing a marketplace that they are violating FDI rules by directly or indirectly influencing the sale price of goods or services and not providing a level playing field for all the vendors," it added.

Reacting to the ED raids, Praveen Khandelwal, Secretary General, Confederation of All India Traders (Cait) and MP, Chandni Chowk, stated, “I welcome the Enforcement Directorate’s actions as a step in the right direction. Earlier, the Competition Commission of India (CCI) also issued penalty notices to Amazon, Flipkart, and their preferred sellers for engaging in anti-competitive practices that have adversely affected small traders and Kirana stores."

Khandelwal also added that in response to multiple complaints filed by the trading community regarding FDI violations and the anti-competitive practices of quick-commerce companies such as Blinkit, Swiggy, and Zepto, they urge both the CCI and the ED to take swift action to prevent any further, irreparable damage to the businesses of small traders. (With ANI inputs)