After crackdown, Xiaomi to flee India for Pakistan? Chinese company reacts

Earlier this week, reports claimed that Xiaomi might move its operations from India to Pakistan. The reports emerged amid a crackdown by the Enforcement Directorate where the Indian government froze Xiaomi’s assets worth $676M for allegedly violating Foreign Exchange Management Act (FEMA) guidelines. However, the smartphone maker has responded to the allegations in a Twitter post and has said that any reports suggesting the company’s move are “completely false & baseless”. The official Twitter handle of Xiaomi gave the statement while responding to a tweet by South Asia Index.

South Asia Index cited sources for its tweet on October 6 where it said, “Chinese mobile-maker Xiaomi may move its operations from India to Pakistan after Indian govt freezes its assets worth $676M”. It further added Xiaomi’s response to the crackdown in a tweet in the thread where it mentioned, “Xiaomi says it has "almost halted" its operations in India after being targeted by Indian govt”.

Xiaomi responds to the allegations

On October 7, Xiaomi replied to the tweet from its official account. It said, “This tweet is completely false & baseless. Xiaomi entered India in 2014 & in less than a year, we embarked on our Make in India journey. 99% of our smartphones & 100% of our TVs are made in India. We'll take all measures to protect our reputation from false & inaccurate claims”.

Xiaomi has also reached out to the Karnataka high court again to challenge the September 29 order of FEMA competent authority which approved the April 29 seizure order of the ED to freeze its assets.

In a petition, Xiaomi had earlier challenged the validity of the Section 37A of FEMA. The section deals with assets held outside India by a company. It mentioned that the challenge to the court order was on the grounds that a member representing a foreign bank was not allowed to be examined during the hearing.

The next hearing of the case is scheduled for October 14.