India's Serious Fraud Investigation Office (SFIO) recommended a detailed investigation into Xiaomi Corp. for alleged business model irregularities. The probe focuses on potential violations of foreign investment laws and requires final approval from the Ministry of Corporate Affairs.
Investigators will examine fund movements within Xiaomi's Indian entities. The SFIO aims to determine if the company secured mandatory government approvals following India's 2020 rule changes for Chinese entities.
The agency is also scrutinizing whether Xiaomi maintained de facto control over local e-commerce sellers. This arrangement could violate India's foreign direct investment policies.
Xiaomi stated it has not received official communication from the SFIO and maintains full compliance with local laws. The company is currently managing separate legal disputes in India regarding taxes and frozen assets.