'Make in Pakistan' on cards for Xiaomi India amid assets seizure case in India? Smartphone maker responds

Xiaomi Technology India Private Limited moved to the Karnataka High Court on October 3 challenging the September 29, 2022 order of the Foreign Exchange Management Act (FEMA) Competent Authority.

Amid the ongoing case of seizure of Xiaomi's Rs 5,551.27 crore assets, speculative reports claimed that the Chinese smartphone maker may move its operation to Pakistan from India. A tweet by a handle named SouthAsiaIndex went viral on Twitter after it claimed that Xiaomi India may shift its operation to the neighbouring country Pakistan. 

"Just IN: Chinese mobile-maker Xiaomi may move its operations from India to Pakistan after Indian govt freezes its assets worth $676M. - sources," read the tweet.

However, Xiaomi was quick to spot this and categorically denied the claim. Xiaomi said that it has been making in India for the last eight years and has no plans to move to Pakistan. 

"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," said Xiaomi.

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 India (@XiaomiIndia) October 7, 2022

Xiaomi Technology India Private Limited moved to the Karnataka High Court on October 3 challenging the September 29, 2022 order of the Foreign Exchange Management Act (FEMA) Competent Authority which confirmed the April 29 seizure order of the Enforcement Directorate (ED). The ED had ordered the seizure of Rs 5,551.27 crore in the accounts of Xiaomi for allegedly violating FEMA rules and transferring money in the guise of royalty to three companies outside India.

Xiaomi had earlier issued a clarification in this regard.

pic.twitter.com/hLfecxK4UE — Xiaomi India (@XiaomiIndia) October 2, 2022

In its petition, Xiaomi challenged the validity of Section 37A of FEMA which relates to assets held outside India by a company. The next hearing in the case will take place on October 14.