India lawmaker, trade group seek suspension of Amazon, Flipkart operations after antitrust breaches

By Aditya Kalra

NEW DELHI (Reuters) - A lawmaker of India's ruling party and a key retailers' group urged the government on Friday to suspend the operations of Amazon and Walmart's Flipkart in light of antitrust breaches.

Indian antitrust investigation reports, which are not public, have found Amazon and Flipkart violated local competition laws by giving preference to select sellers and priority to certain listings, hurting competition, Reuters exclusively reported on Thursday.

Praveen Khandelwal, a lawmaker from Prime Minister Narendra Modi's Bharatiya Janata Party, told Reuters he will soon hold discussions with the federal government and Commerce Minister Piyush Goyal to call for action including "immediately suspending" the e-commerce companies' operations in India.

"The practices of these companies are greatly damaging our manufacturing sector," he said.

Goyal's office, Flipkart and Amazon India did not respond to requests for comment.

The two companies have previously denied any wrongdoing and said they comply with Indian laws. They have not commented on the Competition Commision of India (CCI) reports.

Khandelwal is also secretary general emeritus of India's powerful Confederation of All India Traders, which represents around 80 million shopkeepers and has for years protested against Amazon's and Flipkart's practices which it says hurts smaller retailers.

The CCI findings follow a Reuters investigation from 2021 which was based on Amazon internal documents and showed the company gave preferential treatment for years to a small group of sellers on its platform, some of whom were called "Special Merchants", and used them to bypass Indian laws.

Traders and retailers are seen as a key voting bloc for Modi's ruling party, and the investigation findings come ahead of key state elections in the industrial hubs of Maharashtra and Haryana.

Last month, Commerce Minister Goyal publicly called out Amazon by saying the company's investments often cover its losses and the funds were "not coming in for any great service."

(Reporting by Aditya Kalra; Editing by Susan Fenton)