India queries Apple, Xiaomi in e-commerce probe of Amazon, Flipkart, say sources

India queries Apple, Xiaomi in e-commerce probe of Amazon, Flipkart, say sources

India's financial crime agency has privately sought sales data and other documents from smartphone players including Apple and Xiaomi as part of an investigation into Amazon and Walmart-owned Flipkart, sources familiar with the matter told Reuters.

The agency's queries come in the backdrop of India and the United States nearing a trade deal. The protectionist e-commerce regulations in India have been part of those discussions, according to one Indian official, as US. authorities have long called for opening up the sector.

Enforcement Directorate, which probes economic crimes, has been investigating Amazon and Flipkart for years for allegedly breaching laws by stocking and exerting control over goods they list online. Indian laws prohibit foreign e-commerce companies from doing so as the platforms can only operate a marketplace to connect buyers and sellers.

India's small traders say such clandestine practices, along with steep online discounts, have disrupted businesses at mobile phone stores, but Amazon and Flipkart have maintained they comply with all Indian laws.

The directorate wrote in recent weeks to smartphone companies, including Apple and Xiaomi, to get data related to their online sales, according to three industry sources and one senior Indian government official, who all declined to be named as the investigation process is confidential.

One of the industry sources said the Enforcement Directorate was looking at dealings between smartphone companies and Amazon and Flipkart, and had also sought any financial contracts signed by the phone makers for online sales.

Apple received the agency's directive in March, said one of the sources.

Apple, Amazon and Flipkart did not immediately respond to a request for comment. The Enforcement Directorate also did not respond, while Xiaomi declined to comment.

India's e-retail market is set to exceed $160 billion by 2028, up from $57-60 billion in 2023, consultancy firm Bain estimates.

The government official said the smartphone companies had been approached by the directorate only to seek information and it was unlikely they will be accused in the case, although "the investigation is going."

"Eventually if there's wrongdoing, there will be monetary penalties (on e-commerce companies)," said the official.

Last year, a separate Indian antitrust investigation concluded Amazon and Flipkart breached antitrust laws by giving preference to select sellers on their platforms, and also colluded with Samsung, Xiaomi and other smartphone companies to exclusively launch products online.

The companies have not commented on the report and the antitrust case is still ongoing.

Counterpoint Research data shows that Samsung and Xiaomi together held an almost 33% share of the Indian market in 2024, with Apple at 7%. Around 40% of phone sales in India are online.

A Reuters investigation in 2021, based on internal Amazon papers, showed the company exerted significant control over the inventory of some of the biggest sellers. The company denied wrongdoing.