Indian authorities said on Saturday they had seized $725 million from local bank accounts of Chinese smartphone giant Xiaomi, which it accuses of illegally sending money abroad under the guise of royalty payments.
India’s Financial Crimes Investigation Agency, which launched an investigation in February, said it had confiscated the funds after discovering that Xiaomi’s Indian subsidiary had transferred funds to three overseas entities.
“Huge sums were paid in the name of royalties at the request of the Chinese parent company entities,” the agency said in a statement.
Xiaomi’s Indian subsidiary denied the allegations on Saturday at the end of the day, asserting that these operations were “fully compliant with local laws and regulations”.
“We are committed to working closely with government authorities to clear up any misunderstandings,” Xiaomi India tweeted.
The company’s India office was raided in December as part of a separate investigation into allegations of tax evasion.
Other Chinese smartphone makers, including Huawei, raided their Indian offices around this time.
Relations between New Delhi and Beijing are at their lowest level since the bloody clash on the Himalayan border between soldiers from the two countries in 2020.
Meanwhile, India’s Home Ministry has banned hundreds of Chinese mobile apps, including the popular Tiktok platform.
The government justified the ban on these applications by needing to guard against threats to the country’s sovereignty.
Anti-Chinese sentiment has been growing in India since 2020, leading to calls for a boycott of Chinese products.
However, China remains India’s major economic partner, with bilateral trade reaching more than $125 billion last year, according to local media.
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