ED files FEMA case against Myntra, linked firms for Rs 1,654 cr violation
Jul 23, 2025
Synopsis
The Enforcement Directorate (ED) has filed a case under the Foreign Exchange Management Act (FEMA) against Flipkart-backed Myntra Designs Pvt. Ltd., its related companies, and directors for alleged foreign direct investment (FDI) violations amounting to ₹1,654.35 crore.
The Enforcement Directorate on Wednesday said it has registered a FEMA case against Flipkart-backed e-commerce platform Myntra, linked companies and directors for FDI "contravention" of over Rs 1,654 crore.
The complaint has been filed under Section 16(3) of the Foreign Exchange Management Act after the federal agency received "credible information" that Myntra Designs Private Limited, whose brand name is Myntra, and its related companies are doing multi-brand retail trade in the guise of "wholesale cash and carry".
This is in alleged violation of extant Foreign Direct Investment (FDI) guidelines, the Enforcement Directorate (ED) said.
The case has been registered against the Bengaluru-headquartered Myntra, its linked companies and its directors.
"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/-."
Last year, the central agency had conducted searches at some vendors operating on the platforms of Amazon and Flipkart for alleged violations of foreign exchange and foreign direct investment (FDI) rules.
The agency had searched 19 premises across New Delhi, Bengaluru, Mumbai, Hyderabad and Panchkula (Haryana) at the “main vendors of Amazon and Flipkart."
ED had allegedly unearthed certain FEMA violations that are ordinarily civil offences and entail monetary penalties.
[The Economic Times]
