Chinese phone maker Xiaomi is facing a very complicated situation at this time in India. Local authorities confiscated no less than $ 725 million from his accounts.
Xiaomi is being investigated in India after investigators concluded that the phone maker had made illegal remittances to foreign entities. These are very generous amounts transferred in the form of royalties, according to Reuters. The transfers apparently violate Indian foreign exchange laws.
Xiaomi denies committing any illegality
Xiaomi Technology India Private Limited has been targeted by Indian officials after several overseas transfers worth about $ 725 million. “Under the pretext of reverence payments,” the money was transferred to three foreign entities, including another Xiaomi group entity.
Shortly after the information reached the public space, Xiaomi issued a statement classifying the whole situation as a misunderstanding, insisting that it complies with all Indian laws and will work with government authorities to clarify the situation.
According to the Chinese giant, “the copyright payments and his statements to the bank are all legitimate and truthful.” “These royalty payments that Xiaomi India has made have been for the licensed technologies and IPs used in our Indian version products – we are committed to working closely with government authorities to clarify any misunderstandings,” added a representative of a one of the most important mobile phone manufacturers in the world.
This is not the first time the Indians have targeted Xiaomi. In December 2021, a company headquarters was the subject of a search for alleged tax evasion. At the same time, other Chinese phone manufacturers received similar treatment from local authorities.
This information comes in the context that Xiaomi was the main seller of smartphones in India in 2021, with a market share of 24%. Samsung was in second place, with only 19%.