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

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

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.

ED is investigating alleged violations under the Foreign Exchange Management Act (Fema) that are ordinarily civil offences entailing monetary penalties. Earlier this month, the agency conducted nationwide searches at 19 sites related to large sellers on Amazon and Flipkart in New Delhi,