Xiaomi had about US$670 million of funds frozen at local banks in India last year and has asked for this to be undone. Its application was rejected by an Indian High Court in April.
Xiaomi is not the only Chinese company facing regulatory scrutiny in India with accounts at Vivo, another Chinese smartphone player, also frozen last July. However, a Delhi High Court later lifted the freeze on Vivo’s accounts.
The about-turn for Xiaomi in India has been a red flag for other Chinese firms hoping to prosper in the South Asian market. After early commercial success, sentiment soured for many Chinese businesses following a border clash between the two Asian giants in the Himalayas in the summer of 2020.
Once the top smartphone brand in India for five straight years, Xiaomi ranked only fourth in the first quarter of 2023 after Samsung Electronics, and Chinese brands Oppo and Vivo, with only 16.4 per cent of the market, according to the latest figures from industry research firm IDC.
The Chinese government has not commented publicly on Xiaomi’s dispute in India, although the case has triggered anger among some Chinese netizens.
“If India really confiscates Xiaomi funds, most foreign-funded businesses may have to leave the country,” one user commented on China’s financial portal Sina.com.
“China should make a law banning its businesses from investing in India,” another user named Summer Wind commented on the site.
