ED seizes Rs 5,551 cr deposits of Xiaomi India

Under the guidelines of the Foreign Exchange Management Act (FEMA), the Enforcement Directorate has seized Rs 5,551.27 crore of the Chinese telecom company Xiaomi Technology India. This amount was seized by the Enforcement Directorate from four bank accounts of Xiaomi with HSBC, Citibank, IDBI, and Deutsche Bank. The ED had initiated an investigation against Xiaomi India in connection with the illegal remittances made by the company in February 2022 to companies based abroad. The China-based company  Xiaomi began its operations in India in the year 2014 and started remitting the money in the year 2015.

The Enforcement Directorate in a statement said, “The company remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi group entity in the guise of royalty. Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities.” Xiaomi India is a trader and distributor of mobile phones, under the brand name MI. The Chinese company has an annual turnover of Rs 34,000 crore in India. Xiaomi India obtains entirely manufactured smartphones and other products from manufacturers in China.