It may be the top smartphone seller in India with a 20 per cent marketshare, but Chinese brand Xiaomi has been in the crosshairs of Indian authorities. The company hasn’t found relief from court after ED seized its assets worth Rs 5,551 crore, over unauthorised transfer of funds out of India. Following reports that Xiaomi has halted its operations in India and will move to Pakistan, the top phone maker has denied the claims, according to an Economic Times report.
Will persist despite trouble
After the seizure and rumours that Chinese firms may be banned from selling affordable Rs 12,000 smartphones in India, South Asia Index tweeted about Xiaomi’s big more across the border. But the company has called the information baseless, and will take actions to protect its reputation. The firm, which covered its outlets with ‘Made in India’ banners when anti-China sentiment erupted across India, currently manufactures 90 per cent smartphones and 100 per cent smart TVs in the country.
The Enforcement Directorate’s action against Xiaomi was also based on the argument that there’s no question of paying royalties abroad if the company assembles and distributes phones in India. The body had called royalties sent to three entities in China and US, a tool to move funds out of India for the ultimate benefit of Xiaomi’s parent company.
Chinese firms aren’t happy in Pakistan either
Several Chinese firms were enthusiastic to move to Pakistan as part of the China-Pakistan Economic Corridor (CPEC), but this year 25 of them reportedly threatened to leave over unpaid dues of Rs 300 billion. Earlier, tech companies from across the world also hinted at leaving Pakistan because of laws that targeted internet firms. This year, Pakistan’s top startup Airlift also had to shut down after funding crashed for the quick commerce platform.
Apart from Xiaomi, Vivo is another Chinese smartphone company which has been hit by ED raids, as part of an investigation against money laundering this year. Xiaomi had started operations in India in 2014, and claims that it has been committed to the Make in India initiative since 2015.
