ED Files Rs 1,654 Cr FEMA Case Against Myntra, Alleges FDI Norm Violation
The Enforcement Directorate (ED) has filed a complaint against Myntra Designs Pvt. Ltd. and its affiliates, alleging Foreign Exchange Management Act (FEMA) violations worth Rs 1,654.35 crore. The case has been referred to the Adjudicating Authority for further proceedings.
Myntra, a prominent e-commerce platform, is accused of routing nearly all its sales through a related company, Vector E-Commerce Pvt. Ltd., to circumvent India's FDI norms on multi-brand retail trading. The ED's move signals increased scrutiny of e-commerce platforms with complex corporate structures.
Investigations revealed that Myntra exceeded the 25% limit for selling goods to related group companies, with 100% of its goods being routed to Vector. This transaction structure made business-to-consumer sales appear as business-to-business, violating FDI provisions and India's Consolidated FDI Policy. The alleged violations date back to 2010-2015.
Myntra maintains its commitment to cooperating with authorities and operating with the highest standards of compliance and integrity. Despite the serious allegations, the company continues to describe itself as a 'homegrown marketplace' contributing to India's textile and digital commerce ecosystem. The outcome of the case will depend on the Adjudicating Authority's review of the evidence presented.
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