India’s Serious Fraud Investigation Office has recommended a detailed investigation into Xiaomi’s operations in the country over alleged irregularities in its business model and compliance with foreign investment rules.
The recommendation, contained in a government memorandum, calls for scrutiny of Xiaomi’s financial transactions and whether the company obtained required approvals for foreign investments.
The investigation would also examine the beneficial ownership and control of Xiaomi’s foreign investors and group entities, including whether changes in ownership or control were properly disclosed and approved.
The proposal comes after India tightened scrutiny of Chinese investments following deadly border clashes between the two countries in 2020.
The SFIO, India’s main agency for investigating complex corporate fraud, said its proposed investigation was based on complaints and information received through the country’s commerce ministry.
The memorandum sets out a 21-point investigation framework, including an examination of Xiaomi’s financial statements, auditor reports and potential material misstatements. Investigators could also summon current and former company directors, chief financial officers and compliance officers.
The agency is also seeking coordination with other government bodies to identify potential violations and determine whether overlapping regulatory issues exist.
Meanwhile, Xiaomi said it had not received any notice or communication from the SFIO and maintained that it fully complies with Indian laws. The investigation recommendation remains subject to approval by India’s Ministry of Corporate Affairs.
The proposed probe would add to Xiaomi’s regulatory challenges in India. The company is already facing several tax demands and disputes over royalty payments, while Indian authorities have previously frozen about $584 million in Xiaomi assets over alleged illegal remittances. Xiaomi has disputed the allegations.
The SFIO also wants to examine Xiaomi’s relationships with Indian e-commerce sellers and platforms including Amazon and Walmart-owned Flipkart.
The agency will assess whether Xiaomi exercised effective control over sellers or launch partners while presenting those arrangements as independent relationships. It will also examine whether preferential or exclusive launches of Xiaomi products on selected e-commerce platforms breached the intent of India’s foreign investment rules.
India’s antitrust regulator alleged in 2024 that Xiaomi and other smartphone manufacturers had colluded with Amazon and Flipkart to launch products exclusively on their platforms. Xiaomi has not commented on that allegation.
The scrutiny comes as Xiaomi’s position in India’s smartphone market has weakened. Its market share has fallen to 13%, placing it fourth behind competitors including Apple and Samsung. Its Indian revenue was $2.52 billion in 2025, down 40% from three years earlier.
The proposed investigation could further increase regulatory pressure on Xiaomi as India continues to tighten oversight of Chinese companies and foreign investment in strategic sectors.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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