The Enforcement Directorate (ED) has carried out searches against some sellers doing business through the platforms of Amazon and Flipkart to probe alleged violations of Foreign Exchange Management Act (FEMA) by the e-commerce companies.
The searches are happening at 19 premises located at Delhi, Bengaluru, Mumbai, Hyderabad and Panchkula (Haryana) on the main vendors of Amazon and Flipkart under the FEMA, sources in ED said.
The agency initiated its investigation based on several complaints against Amazon and Flipkart, the e-commerce entities operating on the marketplace model, alleging that they are violating FDI rules by directly or indirectly influencing the sale price of goods or services and not providing level playing field for all the vendors, ED sources observed.
ED sources, however, did not reveal names of entities subjected to searches.
Reacting to the ED’s probe, Praveen Khandelwal, MP, Chandni Chowk, and Secretary General, Confederation of All India Traders (CAIT), said: “India is a vibrant democracy governed by the rule of law and its Constitution. No one can be allowed to bypass or disregard these laws. CAIT, along with several other trade bodies, has been raising these issues for the past few years. I welcome ED’s actions as a step in the right direction. Earlier, the 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.”
“In the new Bharat, led by Prime Minister Narendra Modi, no one is above the law. I am hopeful that now the law will take its rightful course and protect the livelihoods of small shopkeepers. This government is committed to ensuring that no entity can harm the trading community. 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, we urge both the CCI and the ED to take swift action to prevent any further, irreparable damage to the businesses of small traders.”
The ED searches are seen as an attempt to protect the livelihoods of small shopkeepers, and corresponding setback for Amazon and Flipkart, which ride on India for e-commerce sales.