India seizes $ 725 million from Chinese Xiaomi over remittances Business news

NEW DELHI (AP) – Indian authorities seized $ 725 million on Saturday from Chinese smartphone company Xiaomi, which it accuses of violating foreign exchange laws through illegal remittances, officials said.

The Enforcement Authority, India’s financial investigation agency, tweeted that it had seized the amount from a local Xiaomi unit. The move came after the federal agency launched an investigation in February over concerns about illegal remittances, local media reported.

The agency said the smartphone maker transferred $ 725 million to “three overseas-based entities” under the guise of paying royalties, according to a statement quoted by the Press Trust of India. Earlier this month, the agency also questioned Xiaomi global vice president Manu Kumar Jain at the company’s regional office in the southern city of Bengaluru, PTI reports.

The smartphone company said it complied with local law, adding that its “royalties and statements” were “legitimate and genuine.” She said she is committed to working closely with the government to clear up any misunderstandings.

“These royalty payments made by Xiaomi India were for licensed technologies and IPs used in our products for the Indian version. This is a legitimate commercial agreement for Xiaomi India to pay such royalties, ”the statement said.

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Two years ago, India banned more than 100 Chinese-owned applications because tensions between the two countries have risen due to border clashes. In June 2020, Indian and Chinese troops fought with sticks, stones and fists along a disputed section of their border, killing 20 Indian and four Chinese soldiers.

Since February last year, both countries have withdrawn troops from some areas, but they still remain present. Chinese Foreign Minister Wang Yi traveled to New Delhi in March to discuss a faster withdrawal of troops and the possibility of de-escalating the situation.

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