India expands e-commerce crackdown with a new $200 million lawsuit against Walmart Fashion Arm Myntra

India’s Financial Crime Watchdog has filed a complaint against Minetra, the Walmart-backed fashion e-commerce giant.

The complaint marks the latest move in wider crackdowns by Indian authorities that previously targeted Amazon and Flipkart.

On Wednesday, the Enforcement Bureau said the Bengaluru-based fashion e-commerce company had violated the Forex Management Act known as FEMA by leveraging Vector e-commerce, an intermediary for routing sales through retail sales, using the entity associated with “wholesale cash and carry outfits.”

India has restricted foreign companies engaged in wholesale businesses from selling directly to consumers to protect local retailers. The law also limits sales to related group companies to up to 25%.

Myntra was unable to meet the criteria for operating as a wholesale or cash and carry business, as all of its sales were made to agents that were Vector e-commerce. It is listed (PDF).

The agency filed a complaint against Myntra, its affiliates and its directors under section 16(3) of the 1999 FEMA.

myntra Control about half of the entire country’s fashion e-commerce market. The company is gradually Expand Quick Commerce Services And expand its reach in high growth categories, including home, life and beauty. The same goes for the company Testing social commercial water Partnering with celebrities, inviting microinfluencers, and taking on live shows on Instagram, YouTube, Amazon and more.

Complaints come as Indian officials Meeting with the Trump administration will be held Over a potential trade agreement with the United States.

The Modi government in New Delhi is reported Under pressure from the Trump administration To grant Flipkart, owned by Amazon and Walmart, you will grant full access to the $125 billion e-commerce market. The Modi government has been like that for a long time. We plan to release an e-commerce policyhowever, sources previously told TechCrunch that it was on the backburner because it was cautious about not straining relations with the US government.

Nonetheless, Amazon and Flipkart have previously faced investigations by Indian agencies, including the Enforcement Bureau. One of the most recent major actions against the two companies reportedly Federal agency attacks at the offices of some sellers in Novemberhas been accused of violating the country’s foreign investment rules. In April, the agency Personally, I asked for sales data and other documents. From smartphone vendors including Apple and Xiaomi as part of their probes to Amazon and Flipkart.

In response to the latest lawsuit, Myntra said that he has not received copies of the complaints and supports the documents from the authorities, but is “fully committed to working with them at any time.”

“At Myntra, we are deeply committed to supporting all applicable laws on the land and operating at the highest standards of compliance and integrity,” said a company spokesperson.

Founded in 2007, Myntra was Acquired by Indian e-commerce giant Flipkart It was later acquired by Walmart in 2014. As part of Flipkart’s $1.6 billion acquisition 2018.

When contacted, a Walmart spokesman pointed to a statement issued by Myntra.