Company yet to receive complaint copy, says it is cooperating with ED

New Delhi, July 24, 2025 The Enforcement Directorate (ED) has filed a case against fashion e-commerce giant Myntra. The case involves alleged violations of Foreign Direct Investment (FDI) norms under the Foreign Exchange Management Act (FEMA). The probe centers on possible breaches of FDI rules related to inventory-based selling by e-commerce marketplaces. These alleged violations occurred between 2010 and 2015. Authorities had earlier flagged similar concerns in cases involving Amazon and Flipkart.

The ED reportedly registered the case after reviewing a complaint and completing a preliminary inquiry. Sources say the case has now reached the adjudicating authority stage. The move is part of a broader ED crackdown on e-commerce platforms. Authorities accuse these platforms of bypassing India’s retail policy by indirectly controlling vendors through equity stakes or preferential treatment.

In response, a Myntra spokesperson said the company has not yet received an official copy of the complaint. However, it remains fully committed to cooperating with authorities.

Ask ChatGPT “We uphold and apply the highest standards of compliance and integrity,” the statement read. The spokesperson added that Myntra has always operated in accordance with Indian laws and will provide all necessary clarifications.

The case against Myntra is part of a series of ED investigations into major players in India’s digital commerce sector. Over the past two years, the agency has issued notices to Amazon, Flipkart, and others. It alleges they violated the spirit of Press Note 2 of 2018. This policy prohibits marketplaces with FDI from influencing pricing or indirectly holding inventory. The government introduced this policy to protect small Indian traders from unfair competition.

Legal experts say the key issue is Myntra’s role in vendor control. They are examining whether it influenced or controlled vendors on its platform during the period under scrutiny. If the ED can establish this, Myntra may face penalties or further action. However, there is no formal charge sheet yet. Since the case is still in its early stages, the process could continue for several months.

Flipkart acquired Myntra in 2014. Since then, Myntra has become a major player in India’s online fashion retail space.It has historically operated as a marketplace model, which allows third-party sellers to list goods, rather than directly owning inventory. Even unintentional deviations could violate FEMA if they breach FDI rules set for the sector.

The government has increased scrutiny of e-commerce companies due to rising complaints from domestic trader groups. The Confederation of All India Traders (CAIT) has repeatedly urged strict enforcement of FDI rules. It claims big online platforms distort fair trade. The authorities have not announced any penalties so far. The ED will review Myntra’s responses before taking further action.

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