The Enforcement Directorate (ED) has filed a complaint against e-commerce company Myntra. It is alleged that Myntra has violated the rules of Foreign Direct Investment (FDI) in India. ED says that Myntra and its associate companies were actually doing multi-brand retail business (ie retail sale of many brands simultaneously) while claiming retail business. According to the agency, such activities are against the FDI policy, as India has strict rules regarding foreign investment in the multi-brand retail sector. ED has started action against Myntra for violating this rule.

ED has accused Myntra of violating foreign exchange rules of Rs 1,654 crore. According to the agency, Myntra made most of its sales through Vector E-Commerce Private Limited, another company of the same business group. After this, Vector sold these products directly to the customers. ED says that this showed retail sales (B2C) as wholesale sales (B2B) so that foreign investment rules could be ignored.

ED gave this information

The Enforcement Directorate (ED) says that Myntra deliberately created a company named Vector E-Commerce to create a way to sell goods to consumers by bypassing FDI rules. Investigators allege that through this company retail sales were shown as wholesale trade. ED has said in its complaint that Myntra used the FDI permission received for wholesale trade to run multi-brand retail business, which is clearly prohibited under India's FDI policy.