NEW DELHI — On Saturday, the Indian government seized $725 million from Chinese smartphone company Xiaomi, accusing it of violating the country’s foreign currency by making illegal remittances abroad, officials said.
The Enforcement Directorate, India’s financial research firm, tweeted that it had seized the amount of Xiaomi’s local unit. The move comes after an investigation launched by the federal firm in February into considerations of illegal remittances, local media reported.
The firm said the smartphone maker had transferred $725 million to “three overseas-based entities” under the guise of royalty payments, according to a quote from the Press Trust of India. Earlier this month, the firm also interviewed Xiaomi’s global vice president Manu. Kumar Jain, at the company’s regional workplace in the southern city of Bengaluru, PTI reported.
The smartphone company said it complies with local legislation, adding that its “statements of payments and royalties” were “legitimate and truthful. “He said he pledged to work hard with the government to explain any misunderstandings.
“These royalty invoices made through Xiaomi India are similar to the authorized technologies and IP addresses used in our Indian edition products. It is a valid trade agreement for Xiaomi India to make such royalty invoices,” he said.
Two years ago, India banned more than a hundred Chinese-owned apps as tensions between countries over border clashes escalated. In June 2020, Indian and Chinese troops fought with clubs, stones and fists along a disputed segment of their border, killing 20 Indian infantrymen. and 4 Chinese infantrymen.
Since February last year, any of the countries have withdrawn their troops from some sites, but they still have a presence. In March, Chinese Foreign Minister Wang Yi visited New Delhi to discuss accelerating the withdrawal of troops and the option of reducing the situation.
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