INDIA seized US$725 million (RM3.1 billion) from Xiaomi’s local bank accounts after an investigation found that the Chinese smartphone giant unlawfully sent money abroad in the guise of royalty payments, said authorities today.

India’s financial crime investigations agency started investigating the company in February, and said it seized the money from the firm’s local arm after discovering it made remittances to three foreign-based entities.

“Such huge amounts in the name of royalties are remitted on the instructions of their Chinese parent group entities,” said the Enforcement Directorate in a statement.

Xiaomi did not immediately respond to a request for comment.

Its office was raided in a separate investigation over alleged income tax evasion in India in December.

Other Chinese smartphone markers, including Huawei, also had their offices in the country searched at the time.

Relations between both countries have been at low ebb since a deadly clash between their soldiers at the Himalayan border in 2020.

In the aftermath, India’s Home Ministry banned hundreds of mobile applications of Chinese origin, including popular social media platform Tiktok.

The government justified the bans as safeguarding against threats to its sovereignty.

Anti-China sentiment has also grown in the country since the clash, sparking calls for consumer boycotts of Chinese goods.

China continues to be a key economic partner for India, with more than US$125 billion in bilateral trade last year, according to reports. – AFP, April 30, 2022.