Indian officials to examine Amazon after Reuters probe

20 February, 2021
India’s federal monetary crime-fighting firm will examine findings in a Reuters statement, which revealed that Amazon features for years offered preferential treatment to a tiny group of retailers on its India program and utilized them to circumvent the country’s international investment rules, a good senior agency resource told Reuters.

The Reuters story, published on Inside Retail Asia yesterday, was predicated on internal Amazon papers dated between 2012 and 2019. It presented an inside go through the cat-and-mouse game Amazon has played with India’s federal government, adjusting its corporate structures every time the federal government imposed new limitations targeted at protecting small traders.

On Thursday, a senior Enforcement Directorate source told Reuters that “we are examining findings” of the report. The topic matter “isn't entirely new for all of us,” said the foundation, without elaborating and requesting never to be identified.

Amazon didn’t immediately respond to a obtain comment.

Amazon has already been under investigation by India’s Enforcement Directorate for possible violation of foreign purchase rules. Such probes commonly take years in India, and in most cases details aren’t made general public. In the Reuters survey, Amazon said it was positive of its compliance, when asked about the agency’s probe.

In tweets issued on Wednesday, Amazon criticised the record as “unsubstantiated, incomplete, factually incorrect,” without going into specifics. “In last several years, there were (a) number of improvements in regulations; Amazon has on each occasion taken speedy action to make sure compliance,” the company said.

Within an e-mail to workers on Thursday, Amazon’s India head Amit Agarwal addressed the Reuters story, declaring he understood “such instances can be distracting.”

The business was on “the threshold of fabricating a legacy,” he wrote in the e-mail, that was reviewed by Reuters. “It will require significant innovation, it'll push our capabilities, we will be misunderstood, but it will be fulfilling.”

Indian retailers, who certainly are a important part of Prime Minister Narendra Modi’s support basic, have prolonged alleged that e-commerce giants just like Amazon and Walmart’s Flipkart flout federal regulations and that their business practices hurt tiny traders. The companies deny the allegations.

The documents examined by Reuters exposed that Amazon helped a tiny number of sellers prosper on its India platform, providing them with discounted fees and aiding one cut special handles big tech makers such as for example Apple Inc. The business in addition has exercised significant control over the inventory of a number of the biggest retailers on Amazon.found in, the documents show, though it says publicly that retailers operate independently on its program.

Government rules announced in 2016 required that an e-commerce program should “not exercise possession” over sellers’ inventory.

Gopal Krishna Agarwal, a nationwide spokesman for Modi’s ruling get together, said the findings on the Reuters report were “serious” and that “any predatory policy, deep discounting … will not be tolerated by the government. The party will need a stand on that.”

Small businesses are “very important” for the party, he said. “Their concerns will be taken care of.”

In a created response to the Reuters report published on Wednesday, Amazon explained it “will not offer preferential treatment to any seller on its marketplace,” and that it “treats all sellers in a good, transparent, and non-discriminatory approach”.

A leading group of Indian stores urged the federal government to ban the neighborhood procedures of Amazon and said it had been considering taking legal actions, after the Reuters report was published.

The Confederation of most India Traders, which says it represents 80 million shops, said “the shocking revelations” are “sufficient enough to immediately ban functions of Amazon in India.”

Amazon did not react to a demand for touch upon the trader group’s statement.