NEW DELHI — Indian officials confiscated $ 725 million from Chinese smartphone company Xiaomi on Saturday and accused them of violating the country’s foreign exchange law by illegal remittances abroad, officials said.
The executive office, a financial research institute in India, tweeted that it had seized the amount from a local unit of Xiaomi. The move came after federal agencies began investigating concerns about illegal remittances in February, according to local media.
According to a statement quoted by the Indian Pretrust, smartphone makers have sent $ 725 million to “three foreign-based entities” in the guise of paying royalties, officials said. Earlier this month, the agency asked Manu Kumar Jain, Global Vice President of Xiaomi, at its regional office in a city in the south of Bangalore, PTI reported.
The smartphone company said it was in compliance with local law, adding that “royalty payments and statements” were “legal and truthful.” He said he promised to work closely with the government to clarify the misunderstanding.
“The payments for these royalties made by Xiaomi India were for the licensed technology and IP used in the Indian version of the product. It is legal and commercial for Xiaomi India to make such payments for royalties. It’s an arrangement, “the statement said.
Two years ago, India banned more than 100 Chinese-owned apps due to heightened tensions between countries due to border clashes. In June 2020, Indian and Chinese troops fought in clubs, stones and fists along the disputed borders, killing 20 Indians and at least four Chinese soldiers.
Since February last year, the two countries have withdrawn their troops from several sites, but they still maintain their presence. In March, Chinese Foreign Minister Wang Yi visited New Delhi to discuss the potential for promoting the liberation of troops and exacerbating the situation.