Foreign Exchanges Management Act Archives ~ My Mobile India

Highlights Xiaomi has denied speculation it might shift India operations to Pakistan The company is being probed by the ED, which has frozen its funds Xiaomi is accused of making illegal remittances to foreign entities What are your views on Xiaomi's products? Which are your favourite devices from the company? In Brief Xiaomi is one of the biggest tech giants in the world that has a lot riding upon its shoulders, which is only to be expected considering its stature and reputation in the global market. The China-based company has come out with one excellent device after another in the past few years since its inception in 2010. It is well known that India is one of the biggest export markets for tech industries, which is why many of them also have their outlets in the country, including Xiaomi. Xiaomi India has rolled out outstanding gadgets over the past years and most of them have been well received by the Indian users, which is why the increase in demand has increased their supply and that too in large numbers. However, every big company has to go through a rough patch after tasting success and the same is happening with Xiaomi India as it has come under the radar of the Enforcement Directorate (ED), whose authorities immediately froze their funds and assets on account of an alleged violation of the Foreign Exchanges Management Act (FEMA) rules. The ED has frozen assets worth Rs.5,500 crore in April 2022 citing financial irregularities that violated the FEMA act, thereby prompting Xiaomi India to appeal for relief in the Karnataka High Court, which was immediately denied and has crossed more turmoil for the company. In the midst of all this, to make matters worse, there are strong rumours that are circulating that Xiaomi India might shift its operational base to Pakistan after ED froze its assets. Given the present situation of India-Pakistan relations, this news will only add fuel to the fire as Xiaomi India stands to be ostracized by the citizens. The South Asia Index tweeted their claim that the Chinese company will move its operational base to the country that is currently under the FATF grey list and in the worst financial condition than any other. However, Xiaomi India immediately dismissed the speculations of the South Asia Index by claiming them as ‘completely false and baseless’ so as to prevent making things worse for the company. It clarified further that it had joined the ‘Make In India’ initiative of the Modi Government upon entering the Indian market in 2014 where, it claimed, that nearly 99% of their smartphones and smart TVs were assembled in India. This clarification by Xiaomi India is a mere 24 hours after its appeal was rejected by the Karnataka High Court, which cited that while the company is being probed by ED regarding fraudulent remittances it made to foreign entities by passing them off as royalty payments, there can be no relief for the company whatsoever. Conclusion As of now, things don’t look too good for Xiaomi India as the ED is continuing its actions against the company and only time will tell whether the allegations meted out on Xiaomi India are true or not. Also Read: Xiaomi India expands its 5A series line-up

Foreign Exchanges Management Act

Xiaomi India Rubbishes Ugly Rumours; Details Inside