India Directorate Fights Back Against Xiaomi – Kalra, Reuters

India Directorate Fights Back Against Xiaomi - Kalra, Reuters

Today, India’s Directorate of Enforcement has issued orders to search and inspect Chinese electronics maker Xiaomi’s offices in India. The orders were issued as part of an earlier investigation into Xiaomi’s alleged evasion of taxes. Xiaomi has been accused of using shell companies to conduct business in the country and routing goods through Hong Kong and Singapore to evade taxes.

The raids come amid escalating tensions between India and China over the country’s new laws requiring foreign firms, including Chinese-controlled companies, to store Indian users’ data in servers located in India. The laws are seen as a way to ensure better data security and privacy protection.

Xiaomi has denied the accusations, claiming that it has followed all “applicable laws and regulations”. The company also noted that it does not have any production facility or manufacturing unit in India.

Xiaomi has long been a major player in the Indian smartphone market, with around 40% market share. Its phones are popular among lower-income households and the company has been expanding its retail presence in India, as well as ramping up investments in local production and research and development.

India’s Directorate of Enforcement is sending a clear message to Xiaomi that it must comply with the Indian laws and regulations or face repercussions. It remains to be seen how this episode will affect Xiaomi’s business in India, and what other measures the Indian government takes against the company. Either way, it appears that Xiaomi is not backing down and is determined to fight back.