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Updated: July 23, 2025 14:32
Myntra, India's top fashion online portal, is in the eye of a storm after the Enforcement Directorate (ED) lodged a formal complaint of suspected contravention of foreign direct investment (FDI) regulations of ₹1,654 crore. The latest action is to draw attention to rising regulatory heat on the business of internet companies funded by the foreign.
Key Highlights:
ED Files FEMA Case against Myntra: The company has filed a FEMA complaint against Myntra, its directors, and related parties for illegally concealing multi-brand retailing under the cover of wholesale trade.
Modus Operandi Violation: Myntra has been accused of channeling bulk sales by group company Vector E-Commerce Pvt. Ltd., which in turn sold directly to customers. Such an arrangement is accused of masking direct-to-customer (B2C) sales as wholesale (B2B), allowing Myntra to channel FDI banned under prevailing standards for multi-brand trading in retail.
Policy Violation Description: FDI policy rules that no more than 25% wholesale turnover can go to group companies. ED claims that Myntra has crossed this limit under FEMA Section 6(3)(b) and related FDI policy changes.
Industry Impact: The investigation follows wider government suspicion that online retailing giants are sidestepping Indian FDI curbs by employing intricate corporate structures.
Company Stand: Myntra refutes wrongdoing and asserts that its operations are in conformity with applicable laws, with a vow to cooperate with authorities.
Source: Economic Times, India Today, Moneycontrol, Republic World
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