Myntra Designs Pvt Ltd faces a FEMA complaint from ED’s Bengaluru office for alleged ₹1,654 crore FDI violations by operating retail under the guise of wholesale.
According to the agency, the move constitutes an alleged breach of FDI regulations and the stipulations of the Foreign Exchange Management Act.
By excluding inventory based operations FDI policy permits e- commerce-investment.
A Myntra representative affirmed the company’s willingness to fully collaborate with the authorities.
While we have yet to receive the complaint or related documents, we stand prepared to assist the authorities,” the spokesperson said.
The ED said Myntra Designs classified itself as a “wholesale cash and carry” entity and received ₹1,654 crore in FDI. The agency alleged Myntra supplied most products to affiliated company Vector E-Commerce, which subsequently sold them to retail customers.
The ED found that Vector E-Commerce was created to split B2C sales into B2B (Myntra to Vector) and B2C (Vector to customers).
The ED stated Myntra Designs did not fulfill the ‘wholesale cash and carry’ requirements, as it sold all goods exclusively to Vector E-Commerce.
The ED alleged Myntra Designs and others violated Section 6(3)(b) of FEMA and FDI rules involving ₹1,654 crore.
CAIT has persistently claimed that foreign online retailers violate FDI guidelines and urged authorities to take action against malpractices like heavy discounting and predatory pricing.
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The Myntra spokesperson stated that as a domestic marketplace, the company is dedicated to India’s development by supporting the textile and apparel industry via digital commerce.
Partnering with Indian brands, artisans, and weavers, Myntra has showcased traditional crafts worldwide, fostering job creation and entrepreneurship across the country.
