India’s financial crime watchdog has filed a complaint against Walmart-backed fashion e-commerce giant Myntra, alleging the company violated foreign investment rules by channeling over $191 million through a related-party scheme that disguised retail operations as wholesale trade.
This complaint marks the latest move in a broader crackdown by Indian authorities, which previously targeted Amazon and Flipkart.
On Wednesday, the Enforcement Directorate said the Bengaluru-based fashion e-commerce firm violated the Foreign Exchange Management Act, known as FEMA, by engaging in multi-brand retail trading “under the guise of wholesale cash and carry,” utilizing a related entity, Vector E-Commerce, as an intermediary to route retail sales through a wholesale structure.
India restricts foreign companies engaged in wholesale business from making direct sales to consumers in an effort to protect local retailers. The law also limits sales to related group companies to a maximum of 25%.
Myntra failed to meet the conditions for operating as a wholesale or cash-and-carry business, as all of its sales were made exclusively to Vector E-Commerce, the agency stated (PDF).
The agency filed the complaint against Myntra, its related companies, and their directors under section 16(3) of the FEMA, 1999.
Myntra controls around half of the country’s overall fashion e-commerce market. The company is also gradually expanding its quick commerce service and broadening its reach in high-growth categories, including home and living, as well as beauty. The company is also testing the waters in social commerce by partnering with celebrities and bringing on micro-influencers, taking on the likes of Instagram, YouTube, and Amazon’s Live.
Techcrunch event
San Francisco
|
October 27-29, 2025
The complaint comes as Indian officials hold talks with the Trump administration over a potential trade deal with the United States.
The Modi government in New Delhi is reportedly under pressure from the Trump administration to grant Amazon and Walmart-owned Flipkart full access to its $125 billion e-commerce market. The Modi government has long been expected to release its e-commerce policy, but sources previously told TechCrunch that it has been on the back burner, as officials are cautious not to strain relations with the U.S. government.
Nonetheless, Amazon and Flipkart have previously faced investigations by Indian agencies, including the Enforcement Directorate. One of the recent major actions against the two companies was reportedly a raid by the federal agency in November on the offices of some of their sellers, who are accused of violating the country’s foreign investment rules. In April, the agency also privately sought sales data and other documents from smartphone vendors, including Apple and Xiaomi, as part of its probe into Amazon and Flipkart.
Responding to the latest action, Myntra stated that it had not received a copy of the complaint and supporting documents from the authorities but remained “fully committed to cooperating with them at any point of time.”
“At Myntra, we are deeply committed to upholding all applicable laws of the land and operating with the highest standards of compliance and integrity,” a company spokesperson said.
Founded in 2007, Myntra was acquired by the Indian e-commerce giant Flipkart in 2014 and was later bought by Walmart as part of Flipkart’s $1.6 billion acquisition in 2018.
When contacted, a Walmart spokesperson pointed to the statement issued by Myntra.
