Xiaomi rejects speculation over India operations being moved to Pakistan

Rumours started with a portal's tweet that the Chinese cellphone manufacturer may shift its operations from India to Pakistan after its assets worth $676 million were seized

Xiaomi, a leading Chinese mobile manufacturer, has rejected rumours that it will relocate its operations from India to Pakistan, reported Hindustan Times. These speculations surfaced after Enforcement Directorate (ED) froze its assets worth Rs 5,551.27 crore for allegedly breaking the Foreign Exchange Management Act (FEMA) guidelines.

 

It all started when South Asia Index, which focuses on data-driven stories from South Asia, claimed in a tweet while citing sources that the Chinese cellphone manufacturer may shift its operations from India to Pakistan after its assets worth $676 million were seized.

Responding to the assumptions and refuting the tweet, Xiaomi, which entered the Indian market in 2014, 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 per cent of our smartphones & 100 per cent of our TVs are made in India. We'll take all measures to protect our reputation from false & inaccurate claims."

On Friday, Xiaomi filed a new petition with the Karnataka High Court to challenge the September 29 order of the FEMA competent authority that had upheld the ED's April 29 direction to seize the company's assets. 

ED had ordered Xiaomi's asset seizure as punishment for allegedly breaking FEMA regulations and sending money to three entities outside of India under the pretence of royalties.

The Chinese mobile phone manufacturer has now contested the appeal order in its petition on the grounds that an official from a foreign bank was not permitted to be cross-examined during the hearing.

The attorney for Xiaomi claimed that the petition might be upheld because the plea also questioned the legality of Section 37A of the FEMA, which deals with assets held outside of India by a firm.

The high court earlier this year had permitted Xiaomi to use the money for its routine business operations but forbade it from using it to pay royalties.