Xiaomi closes financial services: Chinese smartphone maker Xiaomi has shut down its financial services in India to focus on core business services in India. However, many believe that this decision is not just based on strategic assessment and that there is more to it than meets the eye. Xiaomi finally shut down its financial services provided through the Mi Pay app in India this year, after facing sanctions and seizures in the country.Read also – Xiaomi expected to launch Redmi Note 12 series soon: check expected price and specs here
What led to the closure of Xiaomi’s financial services
- Xiaomi faced a fine of Rs 653 crore and seizure of assets worth Rs 5,500 crore by ED this year.
- It was implied that Xiaomi may have been laundering funds, disguising remittances to companies in China and the United States, as royalties.
- Authorities added that there was no need to pay royalties since the company was now manufacturing its products in India.
- Concerns were sparked again in August when Bloomberg reported that Chinese phones priced below 12,000 rupees would be banned in India.
- Xiaomi had also faced raids from the income tax department late last year, along with other Chinese companies, over a possible breach of tax standards in the country.
- Later, the Enforcement Branch seized Xiaomi’s assets worth Rs 5,500 crore, for the unauthorized transfer of funds out of India, in the name of royalty payment.
In 2020, India banned 267 Chinese apps following a confrontation between Indian soldiers and the People’s Liberation Army (PLA) over the LoC. At the start of this year, 54 Chinese apps were banned with the winds of nationalism fanning anti-China sentiment across the country. Read also – Thinking of buying a smartphone? Xiaomi 12S Ultra To Vivo V25e Phones Coming in October; Prices, Specifications | Watch the video
Sensing climate change, Xiaomi has put up banners outside its stores, to reassure consumers that its devices are made in India. It has increased its manufacturing activity in India to assemble 99% of smartphones and 100% of smart TVs in the country. Read also – Chinese mobile companies plan to set up manufacturing plants in other countries amid India crackdown
The company, however, cited an increased focus on its core business as a reason for pulling out of its second largest market after China.