ED files complaint against Myntra for violations of FDI worth Rs 1,654.35 crore

24 July, Mumbai 2025

The Enforcement Directorate (ED) has filed a complaint against Myntra Designs (Myntra), its associated entities, and directors under the Foreign Exchange Management Act (FEMA), 1999, alleging Foreign Direct Investment (FDI) violations totaling Rs 1,654.35 crore.

The action was initiated by ED's Bengaluru Zonal Office on the basis of information suggesting Myntra and its related companies were engaged in Multi-Brand Retail Trade (MBRT). They allegedly misrepresented their operations as ‘Wholesale Cash & Carry’ businesses, thereby violating the prevailing FDI Policy.

According to the ED's investigation, Myntra Designs declared itself as a ‘wholesale cash & carry’ business and received FDI worth over Rs 1,654.35 crore. The agency found. Myntra primarily sold its goods to Vector E-Commerce, which then retailed these goods to end customers.

The investigation further revealed, Vector E-Commerce was allegedly established and used to split business-to-customer (B2C) transactions into business-to-business (B2B)—from Myntra Designs to Vector E-Commerce—and subsequently B2C, from Vector E-Commerce to retail customers. The ED contends that Myntra Designs was effectively conducting multi-brand retail trading while masquerading as a “wholesale cash & carry” operation.

The ED highlighted that Myntra Designs failed to meet the conditions for ‘wholesale cash and carry trading.’ Specifically, they made 100 per cent of their sales to Vector E-Commerce Pvt Ltd, which contravenes amendments from April 1, 2010, and October 1, 2010. These amendments permitted only 25 per ecnt of sales to be made to companies within the same group or group companies.

Consequently, the Enforcement Directorate alleges, Myntra Designs and others have violated Section 6(3)(b) of the Foreign Exchange Management Act, 1999, as well as the Consolidated FDI Policies dated April 1, 2010, and October 1, 2010, involving the aforementioned amount.

In response to the ED's complaint, Myntra stated, the company remains committed to cooperating with the authorities at any time.

LATEST FASHION NEWS