NEW DELHI (Nov 7): India's financial crime agency has raided offices of some sellers operating on the platforms of Amazon and Flipkart, majority-owned by Walmart, as part of an investigation into alleged violations of foreign investment rules by the e-commerce companies, two government sources said on Thursday.

The searches by the Enforcement Directorate (ED) came weeks after Reuters reported India's antitrust body had found the two companies and their sellers violated competition laws by giving preference to select sellers on their platforms. Both companies have maintained they comply with Indian laws.

One senior government source said raids were being carried out in New Delhi, Mumbai and Bengaluru, but did not give names of sellers whose offices were being raided.

"The raids on sellers of Amazon and Flipkart is a part of ED’s probe ... for alleged violations of foreign exchange laws," said the first government source with direct knowledge.

Amazon and Flipkart did not immediately respond to requests for comment. A representative of the financial crime agency said he had no immediate comment.

Amazon and Flipkart have for years faced allegations from Indian brick-and-mortar retailers that they violate foreign investment rules by working with select preferred sellers.

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 on Amazon.in. Indian laws prohibit foreign e-commerce players from holding inventory of products and permits them only to operate a marketplace where sellers can offer products.

Uploaded by Felyx Teoh