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In 2020, India introduced stricter foreign investment regulations, requiring Chinese entities to obtain prior approval for investments in India. Since 2022, SFIO has frozen 55.51 billion rupees of Xiaomi’s assets in India.
(Deutsche Welle Chinese website) An Indian government document obtained by Reuters shows that India's Serious Fraud Office (SFIO) recommended launching an investigation into Xiaomi on the grounds that its business model is suspected of violating regulations and it fails to comply with foreign investment laws.
Chinese brand Xiaomi was once the best-selling smartphone brand in India, but its market share has been shrinking amid fierce competition from Apple and Samsung. In addition, Xiaomi is also facing multiple tax recovery and royalty payment disputes.
India's Serious Fraud Office suggested that the investigation should examine the flow of funds and whether Xiaomi applied for the necessary investment approvals as required after India stepped up scrutiny of Chinese investments.
The revelation comes as Chinese President Xi Jinping is expected to visit India over the weekend to attend the BRICS summit.
A Xiaomi spokesperson said in a statement to Reuters that the company had not received any notification or communication from India's Serious Fraud Investigation Office, adding: "We attach great importance to the national laws of the countries where we operate and always strictly abide by the laws."
India introduced stricter foreign investment regulations in 2020, requiring Chinese entities to obtain prior government approval for any investment in India. Many companies, including Xiaomi, said this has led to investment delays.
SFIO has frozen 55.51 billion rupees (approximately US$584 million) of Xiaomi’s assets in Indian banks since 2022 on the grounds that Xiaomi is suspected of illegal remittances, but Xiaomi has denied these accusations. Xiaomi has been unable to overturn SFIO’s freezing order.
According to data from Counterpoint Research, Xiaomi’s share of the Indian smartphone market has dropped to 13% from the previous 19%, ranking fourth. Xiaomi's revenue in India in 2025 is expected to be US$2.52 billion, down 40% from three years ago.

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