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In the past two days, India has made trouble again, and once again "laid a cruel hand" on Xiaomi...
On April 30, the first day of Labor Day, India froze Xiaomi India's assets of 5,551,270 rupees (about 4.8 billion yuan).
Xiaomi India is a wholly owned subsidiary of China's Xiaomi Group, and the funds seized by the Indian Law Enforcement Agency are reportedly located in the company's bank account.
The reasons given by the Central Enforcement Agency, India's financial crime fighting agency, are:
From 2015 to date, Xiaomi India has remitted Rs.551 crore to three overseas entities, including remittances in the name of patent fees. Xiaomi India's move is suspected of violating India's Foreign Exchange Control Law and illegally remitting money to foreign entities, and the relevant funds have been seized.
The Central Enforcement Agency of India also stressed:
Such a huge amount of patent law was remitted at the request of a Chinese parent entity. Remittances to unrelated entities of two other U.S. companies are also for the ultimate benefit of Xiaomi Group.
On May 1, Xiaomi India issued a statement in response to the fact that as a brand dedicated to the Indian market, all of the company's operations strictly comply with local laws and regulations.
We carefully studied the orders of the authorities. We believe that the royalties and bills we pay to banks are legal and authentic. These royalties paid by Xiaomi India are used for licensed technology and intellectual property rights used in our Indian version of our products. For Xiaomi India, paying such royalties is a legitimate business practice.
Of course, we will work closely with the government to clarify any misunderstandings.
You know, this is not the first time India has taken a similar move.
In December last year, the Indian tax authorities conducted a large-scale raid on Xiaomi, OPPO, OnePlus and other Chinese mobile device manufacturers in India on the grounds of "suspected tax evasion".
Image source: Observer Network
In early January, Xiaomi India was also chased back for 653 million rupees (about 558 million yuan) in taxes.
The reason given by the Indian side is that Xiaomi India paid "royalties and licensing fees" to Qualcomm and Beijing Xiaomi Mobile Software Co., Ltd. in the United States, evading tariffs.
Xiaomi responded that insisting on legal operation, the root cause of the tax problem this time is that there are differences between the parties on the price determination of imported goods, which has nothing to do with Xiaomi's recent business, and the official statement is not the final result.
Image source: Daily Economic News
And Duck Duck remembers that in February, we also talked about "India's sudden search of Huawei's office and a large number of documents on the grounds of tax evasion investigation"...
Image source: Shell Finance
Why is India so aimed at Chinese mobile phone manufacturers?
Some netizens said that the main reason is that Chinese mobile phones are too hot in India.
According to market research agency Canalys, in 2021, domestic mobile phone brands have occupied nearly 70% of the Indian smartphone market.
Image source: Canalys
And in the latest release of the first quarter of 2022 Indian market smartphone shipment report, domestic brands Millet, realme, vivo, OPPO market share are in the forefront, of which Millet is ranked first with 8 million smartphone shipments, with a market share of 21%.
Image source: Canalys
Duck ducks have to suspect that this wave in India is deliberately suppressed.
To duck said that millet has built a lot of factories in India, obviously to invest, but also led to local employment;
Now India is not accustomed to the domestic mobile phone market being divided by foreign companies, feels that it is unbalanced by others to make money, and runs to knock a bamboo lever; want to support its own mobile phone manufacturers, but why not argue with it...
But yes, India has always been such a moth to foreign companies, who will dare to do business in your house in the future?
Image source:
The Paper: Xiaomi responds to "seized assets by India": the fee bill is legal and true, and the misunderstanding will be clarified
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