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Flipkart, Snapdeal + 19 ors to be investigated for being more than marketplaces, violating FDI laws

Flipkart and Snapdeal, not Amazon but its subsidiary Junglee, and 18 other e-commerce websites will face investigation for possibly violating Indian foreign direct investment (FDI) laws, as per yesterday’s Delhi high court order, reported Mint.

Advocate Rishi Agarwala, acting for the All India Footwear Manufacturers and Retailers Association, won an order passed by Delhi HC justice RS Endlaw directing the government to investigate the activities of the 21 websites and file its report in court within four weeks.

The government has been tasked with establishing whether these websites are just marketplaces, as they claim, or they act as sellers themselves also. India allows FDI in marketplaces but not in multi-brand retail online or offline.

Retailers in India have been fighting for a single and uniformly applicable FDI policy for online and offline retailers.

Even before yesterday’s order, Flipkart was already one of six companies facing investigation for Forex rules violation and RBI rules violations. The government had asked the Enforcement Directorate for an extension to file its findings.

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