India accuses Chinese phone manufacturer Xiaomi of currency violations.
According to a statement, India’s anti-money-laundering agency took control of Xiaomi Technology India’s bank accounts under the provisions of the Foreign Exchange Management Act.
In the latest clash with a Chinese company over market activities, India accused Xiaomi Corp. of violating the country’s foreign-exchange laws and seized 55.51 billion rupees ($726 million) from a local unit of the smartphone maker.
According to the Enforcement Directorate, the company’s local unit remitted money to three foreign-based entities with ties to Xiaomi, falsely claiming it was for royalty payments.
“Xiaomi India purchases completely manufactured mobile sets and other products from Indian manufacturers,” the agency stated in a statement. “The company also provided false information to banks while remitting funds abroad.”
Since the two countries’ troops clashed in 2020, India has taken a hard line against Chinese companies operating within the country. More than 200 Chinese mobile applications have been blacklisted in India, including shopping services from Alibaba Group Holding Ltd., the TikTok short video hit from ByteDance Ltd., and apps used on Xiaomi phones.
China’s Foreign Minister, Wang Yi, visited his counterpart, Subrahmanyam Jaishankar, for the first time since border tensions erupted last month in an effort to reset the relationship.
Under the provisions of the Foreign Exchange Management Act, 1999, the ED seized Rs.5551.27 Crore from M/s Xiaomi Technology India Private Limited’s bank accounts in connection with the company’s illegal outward remittances.
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