India is targeting Xiaomi! Truly, India's money goes to India! On September 9, according to AFP reporting, French media stated that a government document from India revealed the Serious Fraud Investigation Office (SFIO), under India's Ministry of Corporate Affairs, recommended launching an investigation into Xiaomi, citing suspected violations by the company in its business model and compliance with foreign investment regulations. The French media noted that this move could lead to stricter regulatory scrutiny for the smartphone manufacturer in India.
What specific issues are Indian authorities recommending they investigate regarding Xiaomi? This mainly includes two aspects. First, examining how money flows—specifically, how funds enter and exit India, including royalty payments and various transfers, and whether there have been any illegal fund transfers. Second, investigating equity ownership and actual control—essentially, who truly holds decision-making power behind Xiaomi’s Indian entity? Have there been any secret changes in equity structure?
In fact, Xiaomi has already been under scrutiny by Indian authorities previously, facing ongoing tax recovery demands and lawsuits related to royalty fees. Now, another department is proposing an investigation into alleged "foreign investment approval violations." If such allegations are confirmed, India could impose fines on Xiaomi, freeze its assets, restrict operations, or even further disrupt Xiaomi’s business activities in India. Clearly, this action by India is unfriendly toward Chinese companies. For a long time, India’s business environment has been widely criticized around the world. Now, with the intention to target Xiaomi, this move will likely only make foreign investors even more hesitant about investing in India.
Original source: toutiao.com/article/1875863955540992/
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