ED raids Amazon offices and Flipkart sellers

On Thursday, the ED conducted searches at the offices of some sellers registered on Amazon and Flipkart.

The search operations were carried out in connection with an investigation into alleged violations of the Foreign Exchange Management Act (FEMA).

The raids were carried out at the offices of selected sellers in New Delhi, Mumbai, Gurugram, Hyderabad and Bengaluru.

Amid scrutiny on e-commerce platforms operating in the country, the Enforcement Directorate (ED) reportedly conducted raids on Thursday (November 7) at the offices of some sellers registered with Amazon and Flipkart.

The search was carried out in connection with an investigation into alleged violations of the Foreign Exchange Management Act (FEMA), Reuters reports.

The searches were conducted at the offices of selected vendors in New Delhi, Mumbai and Bengaluru, Reuters reported, citing ED officials. However, news agency PTI reported that raids were also carried out in Gurugram and Hyderabad.

The ED has tightened the noose around Amazon and Flipkart over alleged financial transactions carried out by ‘preferred’ suppliers and sellers on their platforms.

“The raids on Amazon and Flipkart sellers are part of the ED’s probe… into alleged violations of foreign exchange laws,” a government official told Reuters.

Inc42 has reached out to Flipkart and Amazon for more information on the ED raids. The story will be updated once a response is received.

This comes months after it was reported that the Competition Commission of India (CCI) had found Amazon and Flipkart violation of the country’s competition laws giving preference to the selection of sellers on their website.

Reports at the time said that the antimonopoly authority had instructed companies submit your latest financial statements determine the exact penalties it will impose.

The move against e-commerce players comes amid growing pressure on the central government to keep their operations under control. 14 September Confederation of All India Traders (CAIT) Praveen Khandelwal called on the government to “pause” operations Amazon and Flipkart as their practices are “seriously damaging” to the country’s manufacturing sector. He also called for stricter regulations on such players to prevent violations of fair competition laws.

Despite mounting pressure, Amazon and Flipkart continue to show business growth thanks to growing e-commerce penetration. For example, Amazon reported that during the recent Amazon Great Indian Festival 2024 annual holiday sale, the total customer visits were 140 Cr. For Flipkart, the engagement rate during the festive season in 2024 was 720 Cr.