Chinese smartphone maker Xiaomi's legal trouble in India continues. Reuters sources said an Indian court has rejected its petition against the seizure of 676 million dollars last year. Xiaomi's assets were seized by Indian authorities, alleging that the company had made illegal remittances to foreign entities by passing them off as royalty payments.

Xiaomi's petition rejected in Indian court

An Indian court has ruled against Chinese smartphone maker Xiaomi&nbsp;in a&nbsp;case involving the seizure of assets worth $676 million, sources told Reuters on Friday. Last year, India's federal financial crime agency had frozen Xiaomi's assets, alleging that the company made illegal remittances to foreign entities by disguising them as royalty payments.

According to the Enforcement Directorate of India, Xiaomi, which came to the country in 2014, began moving money abroad unlawfully in 2015 while providing misleading information to banks. The Chinese company&nbsp;allegedly transferred Rs 5,551.27 crore in foreign currency to three businesses, including a Xiaomi group entity, under the premise of royalty -- money paid to the owner of a product or patent that a third-party exploits. However, Xiaomi has denied the allegations.&nbsp;

Xiaomi's actions, according to the agency, violate Section 4 of the Foreign Exchange Management Act (FEMA), which restricts who can acquire, hold, own, possess, or transfer any foreign exchange, foreign security, or immovable property situated outside India.&nbsp;

Implications Of This Decision For Xiaomi And Other Foreign Companies

The court's decision is a significant blow to Xiaomi, one of India's fastest-growing smartphone brands. Xiaomi has invested heavily in India in recent years, setting up manufacturing facilities, creating jobs, and launching a wide range of affordable smartphones to cater to the country's price-sensitive consumers.

The case highlights the increasing scrutiny and regulatory challenges faced by foreign companies operating in India, especially China. With a push for self-reliance and stricter enforcement of financial regulations, Indian authorities have been cracking down on alleged violations by foreign companies, including those related to tax evasion, money laundering, and foreign exchange rules.

The seizure of Xiaomi's assets is seen as a warning to other foreign companies operating in India to ensure compliance with local laws and regulations. It also underscores the need for companies to have robust internal controls and risk management measures in place to mitigate potential legal and financial risks.

Due to political tensions following a border skirmish, Chinese enterprises have&nbsp;found it difficult to do business in India since 2020.&nbsp;Since then, India has banned over 300 Chinese apps, including popular ones like TikTok, citing security concerns. Many Chinese companies like WeChat and Alibaba have also faced scrutiny and restrictions in recent years due to concerns over data privacy, national security, and compliance with local laws.

An Indian court has ruled against Chinese smartphone maker Xiaomi in a case involving the seizure of assets worth $676 million, sources told Reuters on Friday. Last year, India's federal financial crime agency had frozen Xiaomi's assets, alleging that the company made illegal remittances to foreign entities by disguising them as royalty payments.

An Indian court has ruled against Chinese smartphone maker Xiaomi in a case involving the seizure of assets worth $676 million, sources told Reuters on Friday. Last year, India's federal financial crime agency had frozen Xiaomi's assets, alleging that the company made illegal remittances to foreign entities by disguising them as royalty payments. According to the Enforcement Directorate of India, Xiaomi, which came to the country in 2014, began moving money abroad unlawfully in 2015 while providing misleading information to banks. The Chinese company allegedly transferred Rs 5,551.27 crore in foreign currency to three businesses, including a Xiaomi group entity, under the premise of royalty -- money paid to the owner of a product or patent that a third-party exploits. However, Xiaomi has denied the allegations. Xiaomi's actions, according to the agency, violate Section 4 of the Foreign Exchange Management Act (FEMA), which restricts who can acquire, hold, own, possess, or transfer any foreign exchange, foreign security, or immovable property situated outside India. Implications Of This Decision For Xiaomi And Other Foreign Companies The court's decision is a significant blow to Xiaomi, one of India's fastest-growing smartphone brands. Xiaomi has invested heavily in India in recent years, setting up manufacturing facilities, creating jobs, and launching a wide range of affordable smartphones to cater to the country's price-sensitive consumers. The case highlights the increasing scrutiny and regulatory challenges faced by foreign companies operating in India, especially China. With a push for self-reliance and stricter enforcement of financial regulations, Indian authorities have been cracking down on alleged violations by foreign companies, including those related to tax evasion, money laundering, and foreign exchange rules. The seizure of Xiaomi's assets is seen as a warning to other foreign companies operating in India to ensure compliance with local laws and regulations. It also underscores the need for companies to have robust internal controls and risk management measures in place to mitigate potential legal and financial risks. Due to political tensions following a border skirmish, Chinese enterprises have found it difficult to do business in India since 2020. Since then, India has banned over 300 Chinese apps, including popular ones like TikTok, citing security concerns. Many Chinese companies like WeChat and Alibaba have also faced scrutiny and restrictions in recent years due to concerns over data privacy, national security, and compliance with local laws.

Indian court rejects Xiaomi's petition, upholds seizure of assets worth $676 million

Following an Indian order that froze Chinese smartphone maker Xiaomi Corp's assets worth $682 million, the company on Sunday said it was "disappointed" with it and would continue to protect its interests.&nbsp;

An Indian appellate authority on Friday had confirmed an April order by the Enforcement Directorate to seize Rs 55.51 billion, saying a probe found Xiaomi had made illegal remittances to foreign entities by passing them off as royalty payments.

"Under the cover of various unrelated documentary facade created amongst the group entities, the company remitted this amount in guise of royalty abroad," which violated India's foreign exchange laws, the agency said on Friday.

In a statement on Sunday, Xiaomi said that over 84 per cent of Rs 55.51 billion seized by the Enforcement Directorate earlier this year was the royalty payment made to US chipset company Qualcomm Group.

"We will continue to use all means to protect the reputation and interests of the company and our stakeholders," it said.

The company said that Xiaomi India is an affiliate and one of the Xiaomi Group companies, which entered into a legal agreement with Qualcomm to license IP for manufacturing smartphones. Both Xiaomi and Qualcomm believe that it is a legitimate commercial arrangement for Xiaomi India to pay Qualcomm royalty, the statement said.

With an 18 per cent share each, Xiaomi and Samsung together lead the smartphone market in India, the world's second biggest after China, according to data from Counterpoint Research. Ever since the border clashes in Galwan in 2020, many Chinese companies have struggled to do business in India.

India has cited security concerns in banning more than 300 Chinese apps since then, including popular ones such TikTok, and also tightened rules for Chinese companies investing in India.

(With inputs from agencies)

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Following an Indian order that froze Chinese smartphone maker Xiaomi Corp's assets worth $682 million, the company on Sunday said it was "disappointed" with it and would continue to protect its interests.

Following an Indian order that froze Chinese smartphone maker Xiaomi Corp's assets worth $682 million, the company on Sunday said it was "disappointed" with it and would continue to protect its interests. An Indian appellate authority on Friday had confirmed an April order by the Enforcement Directorate to seize Rs 55.51 billion, saying a probe found Xiaomi had made illegal remittances to foreign entities by passing them off as royalty payments. "Under the cover of various unrelated documentary facade created amongst the group entities, the company remitted this amount in guise of royalty abroad," which violated India's foreign exchange laws, the agency said on Friday. In a statement on Sunday, Xiaomi said that over 84 per cent of Rs 55.51 billion seized by the Enforcement Directorate earlier this year was the royalty payment made to US chipset company Qualcomm Group. "We will continue to use all means to protect the reputation and interests of the company and our stakeholders," it said. The company said that Xiaomi India is an affiliate and one of the Xiaomi Group companies, which entered into a legal agreement with Qualcomm to license IP for manufacturing smartphones. Both Xiaomi and Qualcomm believe that it is a legitimate commercial arrangement for Xiaomi India to pay Qualcomm royalty, the statement said. With an 18 per cent share each, Xiaomi and Samsung together lead the smartphone market in India, the world's second biggest after China, according to data from Counterpoint Research. Ever since the border clashes in Galwan in 2020, many Chinese companies have struggled to do business in India. India has cited security concerns in banning more than 300 Chinese apps since then, including popular ones such TikTok, and also tightened rules for Chinese companies investing in India. (With inputs from agencies)

Xiaomi says will protect business interests following freezing of assets worth $682 million in India

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Xiaomi's petition rejected in Indian court

Indian court rejects Xiaomi's petition, upholds seizure of assets worth $676 million

Xiaomi says will protect business interests following freezing of assets worth $682 million in India