India’s expanding e-commerce market has attracted some of the world’s biggest digital retailers, but that growth has come with increasing legal and regulatory challenges. Global companies including Amazon and Walmart’s Myntra, along with smartphone brands such as Samsung and Xiaomi, are facing investigations for alleged violations of competition law, investment norms, and consumer protection rules.
Most recently, on July 23, India’s federal crime agency confirmed a probe into Myntra over possible breaches of rules that restrict foreign-funded wholesale businesses from engaging in direct-to-consumer sales. The announcement adds to a list of ongoing inquiries targeting the operational models of major foreign players.
An earlier antitrust probe concluded that Amazon and Flipkart favoured select sellers, undermining market competition. Both companies have denied any wrongdoing. Investigators also found that smartphone firms collaborated with e-commerce platforms to launch products exclusively online—another potential breach of Indian competition laws.
Compliance pressures mount amid push to protect local players
India’s Enforcement Directorate has separately launched investigations into Amazon and Flipkart under foreign investment regulations. In 2024, the agency conducted raids at seller offices and requested internal sales data from smartphone brands including Apple and Xiaomi. In one high-profile case dating back to 2021, Flipkart and its founders were asked to explain why they should not face a $1.35 billion penalty for alleged FDI violations.
Regulatory action hasn’t been limited to e-commerce platforms. India’s Bureau of Indian Standards conducted warehouse raids in March 2025, seizing non-compliant products from both Amazon and Flipkart.
Meanwhile, fast-delivery platforms like Zomato, Swiggy, and Zepto are also under scrutiny for deep discounting practices and favouritism toward select restaurants. Antitrust officials have found preliminary evidence that both Zomato and Swiggy violated competition rules.
As India seeks to empower domestic sellers and ensure fair competition, global digital commerce firms are under pressure to rework their strategies in compliance with evolving laws.
(Credit: Reuters)
