The Enforcement Directorate (ED) has reportedly offered Flipkart the option to settle a case involving alleged violations of the Foreign Exchange Management Act (FEMA) if the company accepts its fault and agrees to pay a penalty. This offer was extended last week under FEMA’s compounding provisions, which allow entities to acknowledge breaches and resolve matters by paying a fine, thus avoiding prolonged legal proceedings.
Flipkart, along with Amazon India, has been under ED investigation for allegedly violating FEMA rules, particularly concerning the promotion of heavy discounts to drive sales on their platforms. An executive from one of the firms told PTI that the compounding offer to Flipkart could also be aimed at strengthening India’s position in its ongoing trade negotiations with the United States.
Apart from the ED case, Flipkart is also being investigated by the Competition Commission of India (CCI) over suspected violations of competition laws by some of its subsidiaries. In September 2024, one Flipkart subsidiary received a non-confidential version of the Director General’s investigation report from the CCI, which outlined allegations of anti-competitive practices involving the company and other entities.
