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China’s Xiaomi faces probes in the essential Indian market

China’s Xiaomi faces probes in the essential Indian market

Chinese smartphone manufacturer Xiaomi Corp faces legal issues in India as a federal agency fights financial crime and tax authorities look into its business methods.

Xiaomi admits to the allegations of wrongdoing.

However, it has recently made media accusations that its executives were subjected to intimidation by Indian enforcement officials.

The incident drew responses from the government agency and statements of support from China.

Since February, the Indian financial crime-fighting agency known as the Enforcement Directorate has investigated Xiaomi.

On April 30, the agency revealed that Xiaomi had unlawfully transferred money abroad to three different entities. One of them was a Xiaomi group company “in royalty” payments.

China's Xiaomi faces probes in the essential Indian market

China’s Xiaomi faces probes in the essential Indian market

It took $725 million out of the local accounts of Xiaomi, but the Indian tribunal has placed the decision off pending the legal challenge brought by Xiaomi.

The Chinese company claims the royalty payments it received were legal and related to the “in-licensed technologies and IPs” used within their Indian products.

Xiaomi claims that the payment was made to companies such as U.S. chipmaker Qualcomm Inc and that pertinent disclosures were made in writing to Indian authorities in its court filings.

The Xiaomi Indian lawsuit filed with the court revealed that the company’s top executives had been subjected to “physical violence” threats and coercion from Enforcement Directorate. Enforcement Directorate.

Chinese businesses have had a difficult time conducting business in India since 2020 after a border conflict erupted between the two countries.

India has raised security concerns when banning over 300 Chinese apps and popular ones like TikTok and tightened rules for Chinese businesses that invest in India.

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