The Enforcement Directorate (ED) has conducted raids on several ‘prominent vendors’ operating on Amazon and Flipkart platforms as part of an investigation into alleged violations of foreign direct investment (FDI) regulations, a report has said.
According to news agency PTI, the searches have been conducted at 19 premises across Delhi, Gurugram, Panchkula, Hyderabad and Bengaluru. Reportedly, the ED inspected documents and took copies of some from the premises of about six such vendors who were not named.
The ED's action follows a bunch of complaints that have alleged that the e-commerce giants have been flouting India's FDI rules by influencing the sale price of goods and creating an uneven playing field for vendors. The agency is investigating whether these practices violate the Foreign Exchange Management Act (FEMA).
A few Amazon and Flipkart antitrust investigation reports from August say the platforms “had end-to-end control over the inventory and the sellers are just name lending enterprises.”
CAIT welcomes the ED's move
While Amazon and Flipkart are yet to release an official statement on these raids, the Confederation of All India Traders (CAIT) welcomed the ED's move.
“The CAIT, along with several other trade bodies, has been raising these issues for the past few years. I welcome the Enforcement Directorate's actions as a step in the right direction,” CAIT secretary general and BJP MP from Delhi Praveen Khandelwal said in a statement.
Khandelwal pointed out that the Competition Commission of India (CCI) has also issued penalty notices to Amazon, Flipkart, and their preferred vendors for alleged anti-competitive practices that harm small businesses.
These practices include predatory pricing and deep discounting strategies that create a grey market and cause losses to the exchequer.
Earlier this year, commerce and industry minister Piyush Goyal had also voiced similar concerns, questioning the benefits of large foreign investments in e-commerce. He highlighted the potential for social disruption due to the rapid growth of online retail.
According to news agency PTI, the searches have been conducted at 19 premises across Delhi, Gurugram, Panchkula, Hyderabad and Bengaluru. Reportedly, the ED inspected documents and took copies of some from the premises of about six such vendors who were not named.
The ED's action follows a bunch of complaints that have alleged that the e-commerce giants have been flouting India's FDI rules by influencing the sale price of goods and creating an uneven playing field for vendors. The agency is investigating whether these practices violate the Foreign Exchange Management Act (FEMA).
A few Amazon and Flipkart antitrust investigation reports from August say the platforms “had end-to-end control over the inventory and the sellers are just name lending enterprises.”
CAIT welcomes the ED's move
While Amazon and Flipkart are yet to release an official statement on these raids, the Confederation of All India Traders (CAIT) welcomed the ED's move.
“The CAIT, along with several other trade bodies, has been raising these issues for the past few years. I welcome the Enforcement Directorate's actions as a step in the right direction,” CAIT secretary general and BJP MP from Delhi Praveen Khandelwal said in a statement.
Khandelwal pointed out that the Competition Commission of India (CCI) has also issued penalty notices to Amazon, Flipkart, and their preferred vendors for alleged anti-competitive practices that harm small businesses.
These practices include predatory pricing and deep discounting strategies that create a grey market and cause losses to the exchequer.
Earlier this year, commerce and industry minister Piyush Goyal had also voiced similar concerns, questioning the benefits of large foreign investments in e-commerce. He highlighted the potential for social disruption due to the rapid growth of online retail.
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