India seizes products from Amazon, Flipkart warehouses as crackdown intensifies

India's state-run product certification agency said it raided the Delhi warehouses of e-commerce giants Amazon and Flipkart this month, seizing items that did not meet quality control standards, as it increased its scrutiny of the two firms.

The Bureau of Indian Standards said last week it conducted similar searches at the companies' warehouses in the southern state of Tamil Nadu, saying they stored, sold, and exhibited items that did not have a required standards label. Amazon and Flipkart, which is owned by U.S. retail giant Walmart, had responded saying they comply with local laws.

While Flipkart did not immediately respond to Reuters' requests for comment on the Delhi raids, a spokesperson for Amazon India said the firm is "engaged closely with various stakeholders, including regulators."

Both are the dominant players in India's e-commerce market which, according to estimates by consultancy firm Bain, was worth between $57 billion and $60 billion in 2023, and could top $160 billion in value by 2028.

The agency said on Thursday it has seized items including geysers and food mixers worth about 7 million rupees ($81,561) in warehouses operated by an Amazon subsidiary in Delhi.

The seized products either lacked the standard quality control mark, or carried fake labels, the agency said.

It seized almost $7,000 worth of sports shoes from a Flipkart unit, which were ready for dispatch but did not carry necessary product certification marks.

The warehouse seizures are the latest troubles for Amazon and Flipkart in India. An antitrust investigation last September found the companies had violated local competition laws by giving preference to selected sellers on their shopping websites.

A 2021 Reuters investigation, based on internal Amazon documents, showed the company had for years given preferential treatment to small groups of sellers, and used them to bypass Indian laws. Amazon denied any wrongdoing.

($1 = 85.8250 Indian rupees)