Myntra Pays ₹2.88 Lakh to RBI for FEMA Violations

Fashion e-commerce major Myntra has settled a Foreign Exchange Management Act (FEMA) contraventions case with the Reserve Bank of India (RBI) by paying a compounding fee of ₹2.88 Lakh. This settlement has led to the closure of an investigation by the Enforcement Directorate (ED) into the matter.

The RBI issued the compounding order on April 20, 2026, under Section 15 of FEMA, following a no-objection from the ED for compounding the violations. The investigation by the ED was initiated based on credible information regarding FEMA contraventions by Myntra.

The specific violations involved a delay in filing Annual Performance Reports (APRs) for overseas investments totaling ₹42.85 Cr, and undertaking Overseas Direct Investment (ODI)-related financial commitments amounting to ₹3.03 Cr while APRs were still pending. Myntra approached the RBI to compound these contraventions. After the central bank’s reference, the ED granted its no-objection, allowing the RBI to resolve the issue through the one-time payment.

With the compounding order, the FEMA proceedings against Myntra are now resolved, and the investigation has been terminated. Compounding under FEMA provides a mechanism for entities to settle contraventions by paying a penalty, a route increasingly promoted by the ED as part of the government’s ease-of-doing-business initiative.

This development comes after a separate complaint filed by the ED in July 2025 against Flipkart-owned Myntra, its related entities, and directors for alleged violations of India’s Foreign Direct Investment (FDI) policy amounting to ₹1,654.4 Cr. The ED had alleged that Myntra was engaged in multi-brand retail trading under the guise of wholesale cash-and-carry, violating FDI norms by receiving foreign investments and selling goods to its related company, Vector E-Commerce, which then sold to end consumers. The ED further claimed that this structure allowed retail operations while appearing as wholesale and that Myntra violated FDI rules by exceeding the permitted 25% sales limit to group companies.

At the time of the earlier allegations, Myntra had stated its commitment to complying with all applicable laws and cooperating with authorities, noting it had not yet received a copy of the ED’s complaint.