National Times Bureau, July 23, 2025: The Enforcement Directorate (ED) has filed an official complaint against Myntra Designs Private Limited and its related entities and directors for allegedly violating the Foreign Exchange Management Act (FEMA), involving Foreign Direct Investment (FDI) of ₹1,654.35 crore.
The action follows a detailed investigation that, according to a senior ED official, revealed Myntra misrepresented its business model by posing as a wholesale trader while conducting multi-brand retail trading (MBRT). This approach reportedly violated India’s FDI norms, which restrict foreign investment in direct retail.
The ED claims Myntra received FDI while identifying itself as a wholesale cash-and-carry business. However, investigators found that Myntra sold nearly all of its inventory to Vector E-Commerce Pvt Ltd a related company under the same corporate umbrella which then sold products directly to retail customers. This loop, the ED says, created a false appearance of business-to-business (B2B) transactions, disguising actual business-to-customer (B2C) operations.
As per India’s FDI policies effective from April and October 2010, a wholesale business is allowed to sell no more than 25% of its products to group companies. Myntra, according to the ED, sold 100% of its inventory to Vector, breaching this regulation.
The ED complaint has been submitted to the Adjudicating Authority under Section 16(3) of FEMA, specifically citing violations of Section 6(3)(b) and related FDI rules. The total value of the alleged contravention stands at ₹1,654.35 crore.
Myntra, a leading force in India’s fashion e-commerce sector, has yet to issue an official statement regarding the charges.
ED Accuses Myntra of ₹1,654 Crore FEMA Violation Over FDI Misuse in Retail Structure
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