ED files FEMA case against Myntra over alleged Rs 1,654 cr FDI violation
According to the ED’s Bengaluru Zonal Office, Myntra and its group firms allegedly engaged in multi-brand retail trading while falsely operating under the guise of “Wholesale Cash & Carry.” This activity is not allowed under the current FDI policy, the agency said.
- Jul 23, 2025,
- Updated Jul 23, 2025 2:14 PM IST
Myntra is facing action from the Enforcement Directorate (ED), which has filed a case under the Foreign Exchange Management Act (FEMA) against the e-commerce platform for allegedly flouting Foreign Direct Investment (FDI) norms.
According to the ED, Myntra and related entities carried out Multi-Brand Retail Trade (MBRT) operations while claiming to function as “Wholesale Cash & Carry” businesses, a classification that comes with fewer FDI restrictions. The agency alleges this was a deliberate misrepresentation in violation of India’s FDI policy, which places tight curbs on foreign investment in multi-brand retail.
M/s Vector E-Commerce Pvt. Ltd. was set up and used as a corporate vehicle to split direct B2C transactions—i.e., from Myntra Designs Pvt. Ltd. to retail customers—into two stages: first as a B2B transaction from Myntra to Vector, and then as a B2C sale from Vector to end consumers.
The financial probe agency has claimed that Myntra violated foreign exchange rules involving a sum of Rs 1,654 crore. The alleged violation centers around Myntra routing most of its sales through M/s Vector E-Commerce Pvt. Ltd., a group entity, which then directly sold products to end consumers.
According to the ED, Vector E-Commerce was specifically created to present retail business-to-consumer (B2C) sales as wholesale business-to-business (B2B) transactions on paper — a move the agency says was aimed at circumventing the FDI rules that prohibit such direct-to-consumer sales under the wholesale license.
Myntra is facing action from the Enforcement Directorate (ED), which has filed a case under the Foreign Exchange Management Act (FEMA) against the e-commerce platform for allegedly flouting Foreign Direct Investment (FDI) norms.
According to the ED, Myntra and related entities carried out Multi-Brand Retail Trade (MBRT) operations while claiming to function as “Wholesale Cash & Carry” businesses, a classification that comes with fewer FDI restrictions. The agency alleges this was a deliberate misrepresentation in violation of India’s FDI policy, which places tight curbs on foreign investment in multi-brand retail.
M/s Vector E-Commerce Pvt. Ltd. was set up and used as a corporate vehicle to split direct B2C transactions—i.e., from Myntra Designs Pvt. Ltd. to retail customers—into two stages: first as a B2B transaction from Myntra to Vector, and then as a B2C sale from Vector to end consumers.
The financial probe agency has claimed that Myntra violated foreign exchange rules involving a sum of Rs 1,654 crore. The alleged violation centers around Myntra routing most of its sales through M/s Vector E-Commerce Pvt. Ltd., a group entity, which then directly sold products to end consumers.
According to the ED, Vector E-Commerce was specifically created to present retail business-to-consumer (B2C) sales as wholesale business-to-business (B2B) transactions on paper — a move the agency says was aimed at circumventing the FDI rules that prohibit such direct-to-consumer sales under the wholesale license.