India Files $200M Complaint Against Walmart-Backed Myntra for Investment Violations

India's financial and regulatory authorities have launched multiple enforcement actions against Myntra, the Walmart-backed fashion e-commerce giant, alleging violations of foreign investment laws and tax regulations. The Enforcement Directorate filed a complaint claiming Myntra misrepresented retail sales as wholesale transactions through related-party arrangements, funneling over $191 million via Vector E-Commerce, which contravenes the Foreign Exchange Management Act (FEMA). Concurrently, India's Directorate General of Goods and Services Tax Intelligence (DGGI) has initiated a $200 million case accusing Myntra of wrongfully claiming input tax credits on ineligible supplies, part of a broader crackdown targeting foreign-owned online retailers including Flipkart. These actions reflect India’s heightened scrutiny of foreign investment and tax compliance in e-commerce, amid ongoing trade discussions between the Modi government and the Trump administration. Myntra, commanding roughly half of India’s fashion e-commerce market, is expanding into quick commerce, home decor, beauty, and social commerce, while facing increasing regulatory challenges. Neither Myntra nor Walmart has publicly responded to the complaints, but the company is reportedly preparing to contest the tax allegations.