Amazon, Flipkart sellers raided by ED across India amid money laundering allegations

The Enforcement Directorate (ED) on Thursday launched a pan-India search targeting sellers associated with major e-commerce platforms, including Amazon and Flipkart, in an alleged money laundering investigation. 

Sources informed CNBC-TV18 that the raids are focused on uncovering financial irregularities among vendors linked to these prominent online marketplaces.

The nationwide operation involves searches at various seller locations as well as subsidiaries of these e-commerce giants in Delhi, Mumbai, Hyderabad and Bengaluru. The ED’s probe seeks to identify and gather evidence related to alleged money laundering activities that may have been facilitated through these platforms, as per the CNBC-TV18 report.

Livemint could not independently verify this news development.

According to sources, the ED is investigating potential misuse of these platforms by some sellers who may have engaged in illegal financial practices, possibly using sales on Amazon and Flipkart as a means to channel and hide illicit funds.

Amazon and Flipkart, two of India’s largest e-commerce platforms, have previously faced scrutiny regarding their business practices. However, this latest investigation specifically targets third-party sellers and their transactions on these sites, focusing on compliance with the Prevention of Money Laundering Act (PMLA), as per the report.

The ED's action highlights the government’s ongoing efforts to ensure greater transparency and accountability in India’s rapidly growing e-commerce sector, which has increasingly come under regulatory scrutiny. Both Amazon and Flipkart have yet to issue official statements regarding the raids.

Earlier this year, in September, an investigation by India’s antitrust authority reportedly concluded that Amazon and Walmart's Flipkart breached local competition laws by favouring specific sellers on their platforms. 

According to documents reviewed by Reuters, the Competition Commission of India (CCI) found that both companies promoted select sellers with whom they had business ties, allowing them to appear more prominently in search results, which disadvantaged other vendors.

The CCI initially launched the probe in 2020 to examine allegations that Amazon and Flipkart prioritised certain listings tied to business arrangements. The findings, detailed in two separate reports–a 1,027-page document for Amazon and a 1,696-page document for Flipkart, both dated August 9– indicated that the two e-commerce giants had fostered an environment where preferred sellers were consistently highlighted, impacting market competition.