Retail giants Amazon and Walmart-owned Flipkart violated Indian quality control rules by stocking products that did not have the required standards certificate, India’s top government-run product certification agency said on Thursday.

Raids on warehouses operated by both firms, conducted on Wednesday by the Bureau of Indian Standards in the Tiruvallur district of the southern Indian state of Tamil Nadu, found that the firms had violated rules by storing, selling and exhibiting products that did not carry the BIS standard mark, a government statement said.

A spokesperson for Amazon India said the company was engaged closely with various stakeholders including regulators, while a Flipkart spokesperson said it worked with sellers to drive awareness and to comply with all applicable laws.

“The platform has several processes to review the listings sellers make on the marketplace, and also conducts regular audits to ensure compliance,” a spokesperson for Flipkart said in response to a request for comment.

The raids are the latest headache for the two firms, leading players in India’s e-commerce market which consultancy firm Bain estimated was worth US$57 billion-$60 billion in 2023 and set to top $160 billion in value by 2028.

At the Amazon warehouse, 3,376 products without the standard mark, including flasks, insulated food containers, toys and ceiling fans were seized, according to the statement, while officials seized diapers, casseroles and stainless steel water bottles from the Flipkart warehouse.

Last September, an anti-trust investigation found that both companies violated local competition laws by giving preference to select sellers on their shopping websites.

A few weeks later, in November, investigators raided a number of Amazon and Flipkart sellers following a 2021 Reuters investigation based on internal Amazon documents that showed the company had for years given preferential treatment to small groups of sellers, and used them to bypass Indian laws.

Amazon has denied wrongdoing.

Reporting by Shilpa Jamkhandikar; Editing by Kirsten Donovan and Louise Heavens, of Reuters.

Author Credits: Inside Retail