The Enforcement Directorate (ED) has taken strict action against e-commerce platform Myntra, filing a complaint over alleged violations of Foreign Direct Investment (FDI) rules in India.
The agency claims that Myntra and its related companies were involved in multi-brand retail operations while presenting themselves as operating under single-brand or wholesale retail—a direct breach of India’s FDI policy.
FDI Rules and the Allegation
India has strict regulations when it comes to foreign investment in multi-brand retail. As per ED, Myntra’s activities violate these policies.
While foreign companies are allowed limited investment in single-brand retail and wholesale operations, multi-brand retail involving foreign funding is highly restricted.
ED alleges that Myntra bypassed these rules by showing itself as compliant with the allowed FDI categories, while in reality, it was conducting direct retail sales of multiple brands to consumers.
Enforcement Directorate (ED) has filed a complaint under Foreign Exchange Management Act, 1999 (FEMA) against Myntra Designs Private Limited (Myntra) and its related companies and their Directors for contravention to the tune of Rs 1654,35,08,981: ED pic.twitter.com/KWPrGKAQWZ
— ANI (@ANI) July 23, 2025
Role of Vector E-Commerce
The ED report states that most of Myntra’s sales were executed through Vector E-Commerce Private Limited, a company linked to the same business group.
Vector was responsible for selling products directly to end customers, which constitutes business-to-consumer (B2C) activity.
However, the transactions were allegedly shown as business-to-business (B2B) to stay within the FDI-compliant framework. This was, according to ED, a deliberate attempt to sidestep Indian FDI regulations.
Violation Amount and Investigation
The total violation, as claimed by the Enforcement Directorate, stands at ₹1,654 crore under foreign exchange laws.
The agency has now started formal action against Myntra under these allegations, with further investigation likely to follow.
