Xiaomi May Move Its Operations From India to Pakistan

The Indian division of Chinese smartphone manufacturer Xiaomi is dissatisfied with the Indian government’s move to freeze $683 million of the company’s assets, stating the disputed funds were payments to US chipmaker Qualcomm.

Thursday, an Indian court refused to remove a freeze on $676 million worth of Xiaomi Corp’s assets, despite the Chinese smartphone company’s claim that this enforcement action had “essentially halted” its activities in its vital Indian market.

The Enforcement Directorate, India’s federal financial crime bureau, froze 55.51 billion rupees of Xiaomi assets in April, charging the business made unlawful payments to overseas organizations by passing them off as royalties. A court of appeal affirmed the seizure last week.

In a court filing, Xiaomi said that the asset freeze “is highly unreasonable and has essentially stopped the activities” of the firm. Xiaomi denies any wrongdoing.

Udaya Holla, a lawyer for Xiaomi, asked the court to lift the hold, but the court has already ordered bank guarantees covering the $676 million in frozen assets.

Holla testified before the court that providing such bank guarantees would require depositing the full money, which would make it impossible for the firm to operate, pay workers, and buy inventory before the Hindu festival of Diwali, when consumer sales in India spike.

The court denied the request for emergency relief and continued the case until October 14.

Rumors are that Xiaomi India is thinking to shift its operations from India to Pakistan.

As of right now, Xiaomi already has a manufacturing facility in Lahore, Pakistan, where they produce its smartphones in collaboration with Airlink. This implies that Xiaomi will be relocating all of its Asia operations to Pakistan. Big things have happened for them in Pakistan already.