The agency said that Xiaomi India, acting on the instructions of its parent company, “had discarded foreign currency equivalent to [55.5 billion rupees, $726 million] to three overseas-owned entities, which include an Xiaomi Group entity under the guise of royalties. ” Xiaomi started operations in India in 2014 and started making money a year later, the agency added. Indian authorities have now confiscated an equivalent amount of funds “found in the company’s bank accounts”. “Xiaomi India supplies fully manufactured mobile phone sets and other products from manufacturers in India,” said the Enforcement Directorate. “Xiaomi India has not used any of the services of the three overseas entities to which such funds have been transferred,” the agency added. He also accused the company of providing “misleading information to banks when sending money abroad”. Xiaomi India, which distributes Mi-branded smartphones, said in a statement that “all our operations fully comply with local laws and regulations.” In a Twitter post on Saturday, the company said it believed the rights payments and statements it made to the bank were “all legal and true.” Payments were made for “licensed technologies and IP addresses used in our India products”. India has been tough on Chinese companies since border tensions escalated between the world’s most populous countries two years ago. In 2020, India banned more than 200 applications – many of which were Chinese, including the hugely popular video platform TikTok. Earlier this year, India again banned several Chinese applications belonging to technology companies such as Tencent (TCEHY), Alibaba (BABA) and NetEase (NTES). In response, Beijing said it was “seriously concerned” about India’s crackdown on Chinese companies.
