The Enforcement Directorate (ED) has made a settlement offer to Flipkart: admit to violations under the Foreign Exchange Management Act (FEMA), pay a penalty, and the FEMA case could be closed. The proposal comes under FEMA’s compounding rules, which let firms voluntarily admit to breaches and settle without lengthy prosecutions.
The ED’s proposal also demands that Flipkart dismantle the seller network linked to the alleged violations. The company’s earlier operations from 2009 to 2015 are under scrutiny, including possible breach of foreign investment and retail norms. Flipkart has not publicly responded to the offer yet.
The compounding route offers a quicker resolution compared to protracted legal proceedings. Flipkart and Amazon India have long been under ED investigation for suspected FEMA violations. The compounding option is seen by some officials as a way to avoid lengthy disputes and manage risk exposure efficiently.
If Flipkart accepts, it would mark a rare case of settlement in a major e-commerce FEMA inquiry. However, admitting mistakes may bring reputational and financial implications. The ED’s move signals pressure on large firms to choose settlement over drawn‑out investigations.
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