India’s Enforcement Directorate (ED) is preparing to summon executives from Walmart-owned Flipkart in an ongoing investigation into alleged violations of foreign investment regulations, as Reuters reported. This development follows recent raids on some of Flipkart’s and Amazon’s associated sellers, as authorities seek to establish potential breaches of Indian e-commerce laws. These laws restrict foreign companies from holding inventory and mandate that they operate solely as marketplaces.
According to a senior government source cited by Reuters, the ED plans to review at least five years of business data as part of the investigation, with a focus on the relationships between the e-commerce platforms and their sellers. The source stated that documents seized during the raids are currently under analysis, with initial findings suggesting possible violations of foreign investment rules.
The probe underscores increased regulatory scrutiny on Flipkart and Amazon, two dominant players in India’s $70 billion e-commerce market. Both companies have consistently asserted compliance with Indian laws, though an antitrust investigation previously indicated that both firms may have favored certain sellers.
The ED’s actions highlight India’s ongoing efforts to enforce compliance with local regulations in the rapidly expanding e-commerce sector.
