ED searches 'preferred' vendors of Amazon, Flipkart in FEMA probe
New Delhi, Nov 7: The Enforcement Directorate Thursday conducted searches against some of the "main vendors" operating on platforms of e-commerce giants Amazon and Flipkart as part of a foreign direct investment "violation" investigation, official sources said.
A total of 19 premises of these "preferred" vendors located in Delhi, Gurugram and Panchkula (Haryana), Hyderabad (Telangana) and Bengaluru (Karnataka) were covered as part of the action, the sources said.
It is learnt that the ED inspected documents and took copies of some from the premises of about six such vendors who were not named.
The sources said a probe has been initiated by the federal agency under the provisions of the Foreign Exchange Management Act (FEMA) after it received several complaints against the two large e-commerce companies where it is alleged that they were "violating India's FDI (foreign direct investment) rules by directly or indirectly influencing the sale price of goods or services and not providing level playing field for all the vendors".
There was no immediate response from the two e-commerce companies.
The Confederation of All India Traders (CAIT) welcomed the ED action.
"The CAIT, along with several other trade bodies, has been raising these issues for the past few years. I welcome the Enforcement Directorate's actions as a step in the right direction," CAIT secretary general and BJP MP from Delhi Praveen Khandelwal said in a statement.
He claimed that the Competition Commission of India (CCI) had also issued "penalty notices" to Amazon and Flipkart, and their "preferred" sellers, for "engaging" in anti-competitive practices that have adversely affected small traders and 'kirana' (grocery) stores.
As per existing rules, 100 per cent FDI is allowed through automatic route in the marketplace model of e-commerce. But overseas investment is not permitted in an inventory-based model.
In the market place model, e-commerce entities can only provide a platform for third-party sellers and they cannot own the inventory. They also cannot directly or indirectly influence the price of the goods.
It has been reported in the past that the CCI, which works to ensure fair business practices across sectors in the marketplace, is already looking into alleged anti-competitive ways of e-commerce companies.
The CAIT and mainline mobile retailers' association AIMRA had also petitioned the CCI sometime back seeking immediate suspension of operations of Flipkart and Amazon as they alleged that the companies engaged in predatory pricing and were burning cash to offer heavy discounts on products .
These practices, in turn, are creating a grey market of mobile phones, causing losses to the exchequer "as players in the grey market evade taxes", they had said.
Commerce and Industry Minister Piyush Goyal had recently flagged the same concerns as he had questioned Amazon's announcement of USD 1 billion investment in India, saying the US retailer was not doing any great service to the Indian economy but filling up for the losses it had suffered in the country.
He had said in August that their huge losses in India "smells of predatory pricing", which is not good for the country as it impacts crores of small retailers.
Goyal said e-commerce companies were eating into the small retailers' high-value, high-margin products that are the only items through which the mom-and-pop stores survive.
The minister had said that with the fast-growing online retailing in the country, "are we going to cause huge social disruption with this massive growth of e-commerce".
Khandelwal said that the CAIT has urged the CCI and the ED to protect the businesses of small traders.
"In the new Bharat, led by Prime Minister Narendra Modi Ji, no one is above the law. I am hopeful that now the law will take its rightful course and protect the livelihoods of small shopkeepers.
"This government is committed to ensuring that no entity can harm the trading community. In response to multiple complaints filed by the trading community regarding FDI violations and the anti-competitive practices of quick-commerce companies such as Blinkit, Swiggy, and Zepto, we urge both the CCI and the ED to take swift action and prevent any further, irreparable damage to the businesses of small traders," he said in the statement.
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Israel passes law that would allow it to deport the families of Palestinian attackers
Jerusalem, Nov 7: Israel's parliament passed a law early Thursday that would allow it to deport family members of Palestinian attackers, including the country's own citizens, to the war-ravaged Gaza Strip or other locations.
The law, which was championed by members of Prime Minister Benjamin Netanyahu's Likud party and his far-right allies, passed with a 61-41 vote. But legal experts said that any attempt to implement it would likely lead to it being struck down by Israeli courts.
It would apply to Palestinian citizens of Israel and residents of annexed east Jerusalem who knew about their family members' attacks beforehand or who “express support or identification with the act of terrorism.”
They would be deported, either to the Gaza Strip or another location, for a period of seven to 20 years. The Israel-Hamas war is still raging in Gaza, where tens of thousands have been killed and most of the population has been internally displaced, often multiple times.
It was unclear if it would apply in the occupied West Bank, where Israel already has a long-standing policy of demolishing the family homes of attackers. Palestinians have carried out scores of stabbing, shooting and car-ramming attacks against Israelis in recent years.
Oded Feller, a legal adviser to the Association for Civil Rights in Israel, dismissed the law as “populist nonsense.” He said it was unlikely to be applied, because there is no legal way for the Interior Ministry to send an Israeli citizen to another country or to Gaza.
His organisation doesn't plan to challenge the law unless authorities try to enforce it, in which case he expects any court challenge to succeed.
Eran Shamir-Borer, a senior researcher at the Israel Democracy Institute and a former international law expert for the Israeli military, agreed that the law was likely to be struck down by the Supreme Court.
He said that if a resident of east Jerusalem was deported under the law, it could be seen by many in the international community as a violation of the Fourth Geneva Convention, because they view the area as occupied territory, although Israel doesn't.
The deportation of an Israeli citizen could be seen not only as a violation of their constitutional rights under Israeli law, but also as a breach of their human rights under international law, he said. The law could also be seen as a form of collective punishment and as discriminatory, because it appears to only apply to Arab citizens and residents, and not to family members of Jews convicted under terrorism laws.
“The bottom line is this is completely nonconstitutional and a clear conflict to Israel's core values,” Shamir-Borer said.
Israel captured Gaza, the West Bank and east Jerusalem in the 1967 Middle East war — territories the Palestinians want for their future state. It withdrew settlers and soldiers from Gaza in 2005, but has reoccupied parts of the territory since Hamas' attack on October 7, 2023 triggered the war.
Israel annexed east Jerusalem in a move not recognised by most of the international community. Palestinians there have permanent residency and are allowed to apply for citizenship, but most choose not to, and those who do face a series of obstacles.
Palestinians living in Israel make up around 20 per cent of the country's population. They have citizenship and the right to vote but face widespread discrimination. Many also have close family ties to those in the territories and most sympathise with the Palestinian cause.
