India launched an official probe into Walmart over accusations that the retailer covertly invested in a chain of local convenience stores and supermarkets, which could prompt New Delhi to rethink its decision to allow foreign direct investment in the retail sector.

The commerce ministry entreated the Reserve Bank of India to investigate allegations that Walmart “clandestinely and illegally invested” $100m in the Easyday stores, owned by Walmart’s partner Bharti Enterprises, amid a ban on foreign direct investment in the sector, reports the Financial Time.

“The government should undo this illegal investment immediately,” M.P. Achuthan, a Kerala member of the upper house of parliament for the Communist Party of India, wrote in a letter to Prime Minister Manmohan Singh, also urging the government to “ban Walmart permanently from India”.

Walmart denied the allegations Thursday, saying “We are in complete compliance with India’s FDI laws. All procedures and processes have been duly followed and details filled with relevant Indian government authorities, including the Reserve Bank of India.”

This comes as India further liberalizes foreign investment in the country, allowing foreign companies 100% ownership of local operations, which paved the way for IKEA’s potential landmark investment to set up shops.