Beijing urges India to treat Chinese firms fairly after Xiaomi claims threats

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China on Monday urged India to ensure there is no discrimination against Chinese companies operating in India, after Xiaomi Corp said its executives there had been threatened with violence when questioned over alleged illegal remittances.

Reuters reported on Saturday that Xiaomi, the biggest smartphone seller in India, outlined the alleged threat from officials at the Enforcement Directorate – which fights financial crimes – in a court filing.

The Enforcement Directorate called the allegations untrue.

In late April, it seized US$725 million (around Rs. 5,600 billion) in Xiaomi’s bank accounts in India and said the company had made illegal remittances abroad “under the guise” of royalty payments.

Xiaomi denies wrongdoing and says all of its royalties are legitimate.

A spokesman for China’s foreign ministry, asked about Xiaomi’s court filing, said Beijing firmly defends the rights and interests of Chinese companies.

“China hopes that India will provide a fair, just and non-discriminatory business environment for Chinese companies investing and operating in India, conduct investigations in accordance with the law, and enhance the confidence of international investors,” spokesman Zhao Lijian said in a Beijing news conference.

Neither the enforcement agency nor government spokesmen, nor Xiaomi, which has a 24 percent share of China’s smartphone market and employs around 1,500 people there, immediately responded to Reuters requests for comment.

Many Chinese companies have struggled to do business in India since a clash between soldiers at the countries’ border in 2020. The government has cited security concerns by banning more than 300 Chinese apps — including TikTok — and tightening norms on Chinese companies investing in the country since then.

A court last week put management’s crackdown on Xiaomi’s accounts on hold pending a hearing on May 12.

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