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ED to probe Amazon deals for irregularities

The first one was whether the company violated any provisions of the Foreign Exchange Management Act (Fema) in a 2019 deal with the Future group
Traders body Confederation of All India Traders (CAIT) has urged the Centre to impose a ban on Amazon’s e-commerce portal and its operations in India even as it accused the company of indulging in predatory pricing, deep discounting and inventory control.

Our Bureau   |   Mumbai   |   Published 20.02.21, 01:25 AM

The Enforcement Directorate (ED) is understood to be examining the reports of Amazon.com Inc giving preferential treatment to a small group of sellers on its India platform for years and using them to evade the country’s foreign investment rules, weeks after the agency initiated a probe against the e-commerce giant.

The first one was whether Amazon violated any provisions of the Foreign Exchange Management Act (Fema) in a 2019 deal with the Future group.

On Wednesday, a Reuters report based on internal Amazon documents between 2012 and 2019 said around 33 sellers made for about a third of the value of all goods sold on its platform in early 2019.

The report added that two sellers Cloudtail and Appario in which Amazon held indirect stakes contributed to around 35 per cent to the website’s sales revenue in that same period. Effectively, close to 35 of Amazon’s more than 400,000 sellers in the country made up for two-thirds of its sales.

However, Amit Agarwal, Amazon India chief, told its employees in an internal email that the report was factually incorrect. An Amazon India spokesperson also said the company remained compliant with all the Indian laws.

But on Thursday, a Reuters report quoting a senior ED official said the enforcement agency would examine the findings of the story and that the matter “was not entirely new’’ to it.

Traders body Confederation of All India Traders (CAIT) has urged the Centre to impose a ban on Amazon’s e-commerce portal and its operations in India even as it accused the company of indulging in predatory pricing, deep discounting and inventory control.

CAIT secretary-general Praveen Khandelwal demanded an “immediate ban on Amazon’s portal and its operations in India” and an investigation against the company in a time-bound manner.

Amazon at present is engaged in a legal battle with the Future group on the latter’s Rs 24,713 crore deal with Reliance Retail.

Last week, Amazon challenged an order of the division bench of the Delhi high court that had stayed an earlier order of the same court directing Future Retail Ltd and other statutory authorities to maintain status quo on the deal.

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