Myntra Under Investigation for Alleged Violation of India’s Foreign Investment Rules
India’s Enforcement Directorate has launched an investigation into Myntra, the fashion retail arm of Walmart-owned Flipkart, for allegedly violating foreign direct investment (FDI) regulations. The agency stated that Myntra, which has received around $192 million from foreign investors, breached rules that prohibit foreign-funded wholesale retailers from selling directly to consumers. While the agency did not disclose the names of the investors, it noted that the company, registered as a wholesale entity, routed products through a retailer it owned, which then sold them on Myntra’s online platform.
India’s FDI policy mandates that foreign e-commerce firms can only operate as marketplaces, connecting buyers and sellers, and prohibits them from holding inventory or selling directly to consumers. The investigation into Myntra comes amid longstanding scrutiny of major players like Amazon and Flipkart for allegedly using certain sellers to circumvent these rules — claims both companies have consistently denied.
Founded in 2007 and headquartered in Bengaluru, Myntra is known for its wide range of fashion and lifestyle products. The company last reported an annual revenue of approximately $599 million, according to data from Tofler. Neither Myntra nor Walmart has issued a statement in response to the investigation as of now.
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