India Recommends Probe Into Xiaomi
India’s Serious Fraud Investigation Office (SFIO) has recommended a detailed investigation into Xiaomi’s business operations in the country over alleged irregularities involving its business model and compliance with foreign investment rules. The proposal is awaiting approval from the Ministry of Corporate Affairs.
The investigation would examine the movement of funds, beneficial ownership of investors and group entities, and whether Xiaomi obtained the required government approvals after India tightened scrutiny of Chinese investments in 2020. Xiaomi said it has not received any notice from the SFIO and stressed that it complies fully with Indian laws.
The probe could add to Xiaomi’s challenges in India, where it is already facing tax disputes and a freeze on Indian bank assets. The company has also seen its smartphone market share fall to 13%, placing it fourth in the country. The proposed investigation would additionally examine Xiaomi’s relationships with e-commerce platforms and whether exclusive product launches may have violated India’s foreign investment rules.
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