ED Said to Summon Amazon, Flipkart Executives in Investigation of Foreign Investment Law Violations

These companies say that they follow the laws of the country. However, for the last few years ED Investigating the allegations against these companies. These companies are accused of controlling the inventory of goods through selected sellers. Under the country’s law, foreign e-commerce companies cannot hold inventory of products sold through their websites and can only operate as a marketplace for sellers. Last week, ED had raided some sellers of Amazon and Flipkart. A senior government source having knowledge of this matter said that ED is preparing to send summons to the executives of these companies.

This government source said that the documents seized in the ED raids have provided evidence that these companies have violated laws related to foreign investment. Along with analyzing the data received from these sellers, their dealings with e-commerce companies in the last few years will also be examined. Flipkart is owned by America’s largest retail company Walmart.

Amazon, Flipkart and ED did not respond to questions sent by Reuters in this regard. Amazon and Flipkart have a major share in the country’s approximately $70 billion e-commerce market. According to Datum Intelligence estimates, last year Flipkart’s share in this market was about 32 percent and Amazon’s was about 24 percent. In the investigation against these companies for violation of competition laws, it has been found that they have complete control over the inventory. Many of their sellers are used for show. Two other sources with knowledge of the matter said that the premises of at least two Amazon sellers and four Flipkart sellers were raided last week.