By Aditya Kalra

NEW DELHI, Sept 13 (Reuters) -

A lawmaker of India's ruling party and a key retailers'

group urged the government on Friday to suspend the operations

of Amazon ( AMZN ) and Walmart's ( WMT ) Flipkart in light of

antitrust breaches.

Indian antitrust investigation reports, which are not

public, have found Amazon ( AMZN ) 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 ( AMZN ) and Flipkart's practices which it says hurts

smaller retailers.

The CCI findings follow a Reuters investigation from 2021

which was based on Amazon ( AMZN ) 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 ( AMZN ) by saying the company's investments often cover its

losses and the funds were "not coming in for any great service."