On June 13, according to media reports, according to a document issued by the Indian Enforcement Directorate (Enforcement Directorate), the bureau has officially issued a formal notice to Xiaomi Technology India Private Limited, Xiaomi India Branch, some executives and three banks, Citi, HSBC and Deutsche, accusing them of allegedly violating India's Foreign Exchange Control Act, saying that the company illegally transferred funds abroad and was suspected of money laundering.。

Xiaomi: The point of disagreement is whether royalties should be included in the price of imported goods

Previously, as India has seized a total of 555 millet.100 million rupees of funds, about 48 yuan.200 million yuan。The release of the document by the Indian Law Enforcement Bureau will mean that the above-mentioned funds of Xiaomi will be completely frozen, which is actually no different from being confiscated.。According to Xiaomi's 2022 earnings report, the group's full-year adjusted net profit was approximately RMB 8.5 billion。In other words, the funds seized by the Indian side will be more than half of Xiaomi's full-year net profit last year.。It is also understood that this is the largest amount of funds seized by the Indian side to date.。

In the face of the allegations, Xiaomi said it was disappointed by the decision of the Indian authorities to freeze funds.。It also revealed that the root cause of the dispute between the two sides lies in differences on tax issues, the two sides have been slow to agree on the price of imported goods, and it is impossible to determine whether royalties, including patent license fees, should be included in the price of imported goods.。Xiaomi pointed out that this is a complex technical problem in all countries.。

Since then, in the face of the media, Xiaomi has once again responded to the incident, saying that its attitude towards the case is consistent with the previous one, and reiterated: "The business in India is in accordance with the relevant laws and regulations of India.。"

In April 2022, the Anti-Money Laundering Executive Board of India for the first time accused Xiaomi and its Indian subsidiary of illegally transferring money to foreign entities in the name of "royalties" since 2015, in violation of the relevant provisions of the Foreign Exchange Control Act, and accordingly seized 555 in the bank account of Xiaomi's Indian subsidiary..1.3 billion rupees, which is also the origin of this tax dispute。It is understood that in the last year after the allegations, millet in the first time to appeal, but has not received a response from the Indian authorities。It was not until last October that the Indian side replied to the Xiaomi Group, saying that it refused to unfreeze the funds.。

India proposes new conditions: key positions in Chinese mobile phone manufacturers need to be filled by Indians

Despite the possibility of confiscation of huge sums of money, the "torture" of the Xiaomi Group by the Indian government does not seem to be over yet。Today, according to media reports, the Indian government has asked Chinese smartphone manufacturers such as Xiaomi, OPPO, Realme and Vivo to appoint Indian nationals to key positions such as CEO, COO, CFO and CTO.。

The news also said that the Indian government also requires these companies to outsource contract manufacturing to Indian companies, refine the manufacturing process with the participation of local companies to the level of parts and components, and train local distributors to expand exports.。Government officials have also specifically instructed Chinese companies to comply with laws and regulations and not to evade taxes in India.。

It is understood that Xiaomi mobile phones have dominated India for many years。In July 2014, Xiaomi officially established a company in India and hopes to become the highest market share in India in "3 to 5 years"。Sure enough, three years later, with its strong fan marketing effect and full localization strategy, Xiaomi overtook Samsung in the Indian market and took the top spot in India's market share.。At present, according to IDC's global quarterly mobile phone tracking report, Xiaomi is still the largest smartphone manufacturer in the Indian market, accounting for 21% of the market share in 2022, leading Samsung's 18.1% and 15% of vivo.9%。