ED has recently received a communication from the countrys banking regulator, the Reserve Bank of India regarding a few companies and it has also took up the cases for probe under the provisions of the Foreign Exchange Management Act (FEMA).
As per the current policy, FDI is not allowed in domestic ecommerce companies conducting B2C (business-to-consumer) transactions, while 100% foreign investment is permitted in B2B (business-to-business).
The agency has gathered documents about the business incorporations, shareholders and business market models of these firms, which include big capital and small online retail companies which are based in major metropolis of the country. The probe period for investigating the FDI contributions of these firms under the scanner is before April 2013.
Under FEMA rules, a firm or entity found in contravention of the law can be penalised with a penalty 3 times of the detected violation.
During the interval April - June 2014, foreign direct investments (FDI) registered in India climbed 34%, according to intelligence issued by the Department of Industrial Policy and Promotion.
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