Myntra Under ED Lens For Alleged FEMA Violation Exceeding Rs 1,654 Crore

The case, registered under Section 16(3) of FEMA, follows claims that Myntra was involved in multi-brand retail trade activities under the pretence of wholesale cash-and-carry operations.

According to the ED, Myntra routed the majority of its sales through M/s. Vector E-Commerce Pvt. Ltd., a company from the same corporate group.

Source : Myntra Blog

The Enforcement Directorate (ED) initiated proceedings against popular e-commerce platform, Myntra, on Wednesday. 

Myntra Designs Private Limited, along with associated entities and directors, came under the scanner of the authorities for alleged violations of the Foreign Exchange Management Act (FEMA) amounting to more than Rs 1,654 crore.

Enforcement Directorate (ED) has filed a complaint under Foreign Exchange Management Act, 1999 (FEMA) against Myntra Designs Private Limited (Myntra) and its related companies and their Directors for contravention to the tune of Rs 1654,35,08,981: ED pic.twitter.com/KWPrGKAQWZ

— ANI (@ANI) July 23, 2025

The case, registered under Section 16(3) of FEMA, follows claims that Myntra was involved in multi-brand retail trade activities under the pretence of wholesale cash-and-carry operations.

According to the ED, Myntra routed the majority of its sales through M/s. Vector E-Commerce Pvt. Ltd., a company from the same corporate group. Vector, in turn, is alleged to have sold products directly to end consumers.

The agency contends that Vector was set up with the deliberate intention to portray retail (B2C) sales as wholesale (B2B) transactions, thereby circumventing the Foreign Direct Investment (FDI) norms that prohibit multi-brand retail trading by foreign-funded entities.

Further, the authority said, "Myntra Designs have not satisfied the condition laid down for “Wholesale/Cash & Carry Trading” as they have made cent per cent sales to Vector E-Commerce Pvt. Ltd which is in contravention of amendment dated 01.04.2010 and 01.10.2010 which permitted only 25% sale to companies belonging to the same group or group companies. Myntra Designs Pvt. Ltd. and others have contravened the provisions as per section 6(3)(b) of the Foreign Exchange Management Act, 1999 and Consolidated FDI Policy dated 01.04.2010 and Consolidated FDI Policy dated 01.10.2010 to the tune of Rs. 1654,35,08,981/-."

The investigation will assess whether these structures were misused to bypass FDI rules under the guise of compliance. The ED’s inquiry is expected to set a precedent in addressing regulatory grey zones exploited by e-commerce platforms operating in India. Further details regarding the course of the investigation or potential penalties have not been disclosed yet.