Renowned Chinese smartphone maker Xiaomi said it was “disappointed” by Indian authorities’ decision to seize the equivalent of $682 million in funds from its subsidiary in the country. Xiaomi promises to continue protecting its division’s interests.
On Friday, Indian authorities confirmed the legitimacy of the April order by the department involved in fighting financial crimes to seize Rs 55.51 billion from Xiaomi India. According to the agency, Xiaomi made illegal money transfers to foreign companies and issued them as royalties.
In a statement, Xiaomi insists that more than 84% of that amount actually went to America’s Qualcomm earlier this year to pay royalties. The company promised to use all means to protect its reputation and interests, as well as the interests of shareholders – according to reports, Xiaomi India actually reached an agreement with Qualcomm to pay royalties related to the release of smartphones. The statement indicates that both Xiaomi and Qualcomm believe the deal is legitimate.
Today, Xiaomi and Samsung lead the Indian smartphone market with 18% each. According to Counterpoint Research, the Indian market is the second largest after China. Many Chinese companies have had difficulties doing business in India recently due to political tensions between the countries.
India has banned more than 300 Chinese apps, including popular services like TikTok, since the conflict at the India-China border in 2020, citing security concerns, and has also tightened business rules for Chinese companies on its territory and intends to do so even banning Chinese companies from selling smartphones for less than $150. Manufacturers from China traditionally dominate this segment.