India seizes 725 million USD from Chinese company for illegal money transfer

Employees at a Xiaomi store in Shanghai, China in November 2021 – Photo: REUTERS

According to AFP news agency, The Financial Crimes Investigation Agency of India started investigating Xiaomi in February of this year and said they had seized the money 725 million USD from this company’s local branch, after it was discovered that the company had transferred funds to 3 entities based abroad.

“Such huge amounts of money in the name of royalties were sent under the instructions of the relevant entities, the parent company in China,” the agency said.

The agency said that Xiaomi “provided false information to banks when transferring money abroad”.

Xiaomi has been operating in India since 2014. AFP said it has contacted Xiaomi, but the Chinese smartphone giant has not yet commented on the information.

In December 2021, the authorities raided Xiaomi’s office in India in another investigation into alleged income tax evasion. At that time, the offices of other Chinese smartphone manufacturers in India such as Huawei were also inspected.

Relations between India and China have become more strained since a deadly clash between the two countries’ troops on the Himalayan border in 2020.

Later, India’s Ministry of Home Affairs banned hundreds of mobile apps originating in China, including the popular short video app TikTok.

The Indian government explained that it banned these apps in response to threats to India’s sovereignty.

Despite the tensions, China continues to be India’s key economic partner, with bilateral trade reaching more than $125 billion last year.