An ED probe has reportedly found that the e-commerce giants have oversight over their sellers’ operations, including control over warehouses, inventory and even profit margins

Top executives of e-commerce giants Amazon and Flipkart are under the scanner of the Enforcement Directorate (ED) over alleged violations of foreign investment regulations, sources have told India Today.

The Enforcement Directorate (ED) has uncovered evidence suggesting that Amazon and Flipkart exert significant control over their preferred sellers. Investigations revealed close ties between these sellers and the e-commerce giants,

The report noted that ED is investigating the alleged violations under the Foreign Exchange Management Act (FEMA) that are typically civil offences including monetary penalties

The ED is scrutinising whether Amazon and Flipkart controlled vendors in ways that violate regulations, which mandate that these platforms operate purely as intermediaries and not as inventory-based b

Under India's FDI rules, e-commerce platforms are prohibited from exercising control over vendors and are required to operate solely as neutral intermediaries

A source said, “The sellers covered during the searches were summoned and have been questioned to explain certain transactions and arrangements. Documents are being studied thoroughly. The main focus is to ascertain whether Amazon and Flipkart operated through a preferred set of sellers,

ED's aim is to know if the ecommerce majors were exercising control over vendors, which violates FDI rules as they can only act as platforms.