Scrutiny Tightens: Xiaomi Faces SFIO Investigation in India

India's Serious Fraud Investigation Office has recommended a probe into Xiaomi's business practices, focusing on compliance with foreign investment laws and scrutiny of fund movements. This comes in light of intensified scrutiny after India's stricter foreign investment regulations post-2020. Xiaomi denies any misconduct and emphasizes its adherence to local laws.

The Serious Fraud Investigation Office (SFIO) of India has proposed a comprehensive investigation into Xiaomi, scrutinizing the smartphone manufacturer's adherence to foreign investment regulations, according to a government document.

Once India's premier smartphone brand, Xiaomi now grapples with intense competition and multiple financial disputes as its market share continues to decline significantly. At the heart of the proposed probe is the examination of the company's foreign investment compliance, particularly concerning fund movements and necessary investment approvals post-2020's heightened Indo-China tensions.

Xiaomi, one of the many Chinese companies affected by the new investment rules, insists on its full compliance with local laws. Meanwhile, the proposal is pending approval, with no definitive timeline for ministers to proceed, highlighting the nuanced regulatory environment in which foreign enterprises in India operate.