The Enforcement Directorate (ED) has shifted its focus to probing into e-commerce biggies Amazon and Flipkart, and their vendors, and whether arrangement between them had violated the foreign direct investment (FDI) norms, the Economic Times reported.
The ED conducted pan-India search at main sellers of Amazon and Flipkart on November 7. The agency is now aiming to know if the e-commerce majors were exercising control over vendors, which violates FDI rules as they can only act as platforms.
The ED wants to find out whether the platforms played a role in influencing prices and if the sellers breached the 25 percent sales limit, the report further stated.
Moneycontrol couldn't independently verify the report.
“The sellers covered during the searches were summoned and have been questioned to explain certain transactions and arrangements. Documents are being studied thoroughly,” an official with knowledge of the matter told the publication.
Also Read | India to summon Amazon, Flipkart executives as regulatory scrutiny grows: Report
The official further said that managerial personnel who handle the FDI will be asked to join the probe once all search-related documents are studied and people linked to them are questioned, the report added.
Amazon India and Flipkart did not respond to the publication's queries.
The searches come weeks after the Competition Commission of India found the two companies and their sellers violated competition laws by giving preference to select sellers on their platforms. Both the companies have maintained that they comply with the Indian laws.
The raids are the latest setback for Amazon and Flipkart, which count India as a key growth market where e-commerce sales are rising rapidly.
Commerce Minister Piyush Goyal had in August publicly slammed Amazon, saying its investments in India have often been used to cover its business losses, adding that such losses "smell of predatory pricing".
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