wordpress blog stats
Connect with us

Hi, what are you looking for?

ED investigating Amazon for possible FDI violations

Amazon LogoOnline retailer Amazon India has come under Enforcement Directorate (ED) scanner for possibly violating the FDI rules of the country, reports Economic Times. The ED suspects that Amazon has been selling directly to customers under the radar, by making it appear like genuine sales on behalf of vendors. It also suspects the online retailer of manipulating and controlling prices on its website.

Currently, India does not allow FDI in multi-brand retail, instead Amazon works by acting as a marketplace for vendors to sell goods, then charges the third-party suppliers commissions based on products sold. The accusations of direct selling and price fixing would imply Amazon acting as a retailer, rather than just a marketplace, violating India’s FDI policy. The ED is still trying to establish if there has indeed been a violation, meanwhile Amazon itself has refused to comment on the development.

Previously the Reserve Bank of India had initiated the probe into business models of a few e-commerce companies by sending a reference probe to ED, which then began investigating companies with similar business models. As per FEMA norms, a penalty up to three times of the foreign investment or contravention received, can be imposed by the ED. Ecommerce venture Flipkart had a similar run in with the ED when it received a notice alleging violation of Rs 1,400 crore under FEMA, from the authority in May.

Amazon has also been accused by the commercial taxes department of Karnataka of making a back-door entry in India rather than opening its own subsidiaries. The company however denied these claims stating that it was in compliance of all FDI rules. Interestingly, Amazon has been involved in squabbles with various organizations previously including for tax avoidance in the UK, working conditions in warehouses in the USA, e-book pricing with Hachette and opposition to trade unions in both US and UK among others.

Amazon in India: Amazon has been looking to rapidly expand its footprint in India and, in July, had announced a $2 billion investment in the country to that end. The company also appointed Abhijeet Muzumdar to look after mergers and acquisitions in Southeast Asia and India, just last month. The platform had also announced its intentions to open five new fulfillment centres in the country to take the total number of fulfillment centres to seven. It had also launched a Gift Cards Store with gift cards from over 70 brands last month.

Advertisement. Scroll to continue reading.
Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

News

In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

News

By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

News

By Stella Joseph, Prakhil Mishra, and Yash Desai The Government of India circulated proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”) which...

You May Also Like

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ