ED terminates foreign exchange violation investigation into Myntra

The Enforcement Directorate terminated its FEMA investigation against Myntra Designs Private Limited after the RBI compounded alleged foreign exchange violations. Acting on the ED's no-objection, the RBI settled the matter with a one-time payment of Rs 2.88 lakh

New Delhi: A foreign exchange violation investigation against Flipkart-backed online fashion-and-lifestyle platform Myntra has been “terminated” after the RBI issued a compounding order based on a “no objection” given by the Enforcement Directorate (ED).

The Reserve Bank of India (RBI) issued the order on April 20 in the case of Myntra Designs Private Limited, the ED said in a statement on Thursday.

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The central agency initiated a probe against the e-commerce platform in July 2025 for alleged contraventions of the Foreign Exchange Management Act (FEMA), based on “credible” information.

The ED had then said it had registered a FEMA case against Myntra, its linked companies and directors for an alleged FDI (foreign direct investment) violation exceeding Rs 1,654 crore.

“The RBI has issued a compounding order on 20.04.2026 under section 15 of FEMA, in the case of Myntra Designs Private Limited, which has resulted into termination of investigation against the company for alleged contraventions of the provisions of FEMA, 1999…,” the agency said.

Myntra is the brand name of Myntra Designs. Founded in 2007, the Bengaluru-headquartered company is part of the Flipkart Group, which is owned by Walmart. A compounding order in the regulatory context means a formal decision taken by an authority to settle an offence by allowing the defaulter to pay a monetary penalty instead of facing prosecution.

The latest statement said the ED was probing the company for two alleged FEMA contraventions involving transactions worth Rs 45.88 crore. Myntra, according to the ED, made a one-time payment of Rs 2.88 lakh to get the case compounded or closed.

Compounding is a provision available in the FEMA and the ED has promoted this provision since last year in the spirit of the Union government’s “ease of doing business” and as a measure to reduce litigation.

“The case was under investigation while the company filed an application before the RBI for compounding the said contraventions under FEMA as per the provisions of section 15 of the Act.

“On reference from RBI, the ED issued no objection for such compounding in line with the true spirit of the Act,” the federal agency said.

Accordingly, it said, the RBI, on the basis of the no objection issued by the ED, has compounded the said contraventions vide compounding order dated April 20 with a one-time payment of Rs 2.88 lakh.

The two “contraventions” the ED probed were — a delay in submitting APRs (annual performance reports) under Regulation 15(iii) of the FEM (Transfer or Issue of Any Foreign Security) Regulations, 2004, covering Rs. 42.85 crore and undertaking financial commitment by way of ODI (overseas direct investment) pending submission of APRs under Regulation 6(2) (iv) of FEMA 120/RB-2004, covering Rs 3.03 crore.