India siezes $725 million from China’s Xiaomi in forex probe
New Delhi, Apr 30 (EFE).- India has seized $725 million from Chinese smartphone giant Xiaomi’s India subsidiary for allegedly funneling money abroad disguised as royalty payments, India’s economic intelligence agency said in a Saturday statement.
The Enforcement Directorate said that the probe was in relation to “illegal remittances” sent abroad by the Chinese firm in February.
“ED has seized Rs.5551.27 Crore of M/s Xiaomi Technology India Private Limited lying in the bank accounts under the provisions of Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company,” the agency said in a statement.
The agency has accused the Chinese phone and technology maker, which began operations in India in 2014, of illegally sending millions of dollars to three overseas companies disguised as copyrights and royalties.
According to the agency, Xiaomi India has not used the services of any of the companies listed above.
India claims that the transfers were made under the instructions of the parent company for the benefit of Xiaomi.
The million-dollar embargo comes after India’s tax department last December searched the offices of Xiaomi in a separate case of tax evasion, as well as Chinese technology company Oppo, another of the world’s largest smartphone sellers.
The escalation of tension between New Delhi and Beijing has led to increased scrutiny of Chinese companies in India, which has also blocked more than 200 mostly Chinese-origin apps in the past two years.
Relations between the two nuclear powers began to deteriorate in 2020 after a border clash in the Galwan Valley, west of Lake Pangong.
The scuffle was the worst in 45 years along the Sino-Indian border and at least 20 Indian soldiers were killed and 76 were wounded.
New Delhi and Beijing have since tried to resolve the crisis through diplomatic routes. EFE