Xiaomi Technology India has Rs 4,704.21 crore of its funds held up as of December 2024, after local authorities attached some of its bank accounts, the company’s Chinese parent revealed, according to a report by the Economic Times. The smartphone maker has indicated that it is open to settlement negotiations.
Xiaomi Technology India, a wholly owned subsidiary of Xiaomi Corp, has faced multiple investigations and notifications since December 2021 from authorities such as the Income Tax Department, the Directorate of Revenue Intelligence, and the Directorate of Enforcement. These probes are related to alleged non-compliance with income tax, Customs duties, and foreign exchange regulations.
In its 2024 earnings report, Xiaomi Corp stated that the cases in India are still at the hearing stages and remain unresolved. The company acknowledged that future judgments or settlements could negatively impact its operating results or cash flow.
The Economic Times report further cited Xiaomi’s statement, which mentioned that Indian authorities have accused the company of “inappropriately deducting certain costs and expenses, including purchase costs of mobile phones and royalty fees paid to overseas third parties as well as companies within the group.”
“As a result, certain of its (Xiaomi India) bank accounts have been attached and thereby ₹4,704.21 crore (equivalent to RMB 4,016,462,000) has been considered as restrictive as of December 31, 2024,” Xiaomi said in a statement.
Xiaomi management said it has reviewed the situation with professional advisors and believes the company has valid grounds to respond to Indian authorities. However, it added that estimating the financial impact at this stage is not feasible.
Xiaomi held a 12 percent share in India’s smartphone market in 2024, ranking fourth behind Vivo, Samsung, and Oppo, as per data from market researcher International Data Corporation (IDC), quoted by ET.
Despite facing challenges in India, Xiaomi reported a 26% increase in sales across India and Europe in calendar 2024. However, global smartphone shipments for the company declined 0.9% sequentially in the December quarter, largely due to lower shipments in India following earlier Diwali-related supplies.
