India’s federal financial-crime fighting agency is probing the local unit of China’s Xiaomi Corp over its compliance with Indian foreign exchange law.
Reuters reported on Apr 13 that the Enforcement Directorate of India is checking fund flows between Xiaomi India and its parent entity, including royalty payments.
The agency has summoned Manu Kumar Jain, Xiaomi India’s former managing director, for examination. In fact, it has been investigating Xiaomi India since February.
A company spokesperson stated that Xiaomi was “fully compliant with all the regulations” of India.
The spokesperson added, “We are cooperating with authorities with their ongoing investigation to ensure they have all the requisite information.”
This is not the first time India has investigated Xiaomi. The mobile phone giant was raided in December over alleged tax evasion.
According to Reuters, on Jan 5, India requested local Xiaomi to pay 6.53 billion rupees (87.8 million dollars) in import taxes it found it evaded from April 2017 to June 2020.
India’s Directorate of Revenue Intelligence discovered that Xiaomi had evaded some tax on trading with Qualcomm USA and Beijing Xiaomi Mobile Software Co Ltd, including royalty and license fees.