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India’s Serious Fraud Investigation Office (SFIO) is seeking approval for a detailed probe into Xiaomi’s India business, including its fund flows, ownership structure and foreign investment approvals. The 21-point investigation plan was drafted in May 2026 and is awaiting clearance from the Ministry of Corporate Affairs.
The development comes three days before Chinese President Xi Jinping’s expected arrival in Delhi for the BRICS summit. The timing comes as India and China work towards stabilizing bilateral relations. In March, the Union Cabinet eased Press Note 3, which governed Chinese investment in India for six years.
The proposed investigation covers Xiaomi Technology India and related entities. SFIO wants to trace fund movements and examine the beneficial ownership of foreign investors and group entities.
“The most important part of the proposed investigation should be examination of the beneficial ownership of foreign investors and group entities,” the memorandum said.
The agency also wants to verify whether direct or indirect beneficial ownership, control, or changes in control were disclosed and approved as required.
The agency would examine financial statements and auditor reports filed with the government for material misstatements. The team could also question current and former directors, CFOs, and compliance officers.
The plan also calls for coordination with other government agencies to examine overlapping violations. Complaints and inputs received through the commerce ministry form the basis of the recommendation.
Xiaomi said it had not received any notice or communication from SFIO. “We accord paramount importance to the laws of the land and comply with them fully at all times,” a company spokesperson said.
China’s foreign ministry also called for a fair, just, transparent and nondiscriminatory business environment for companies from all countries investing and operating in India.
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The SFIO proposal also seeks scrutiny of Xiaomi’s online sales practices. The agency wants to assess whether the company exercised ‘de facto control’ over Indian sellers or launch partners while presenting those arrangements as arm’s-length.
The inquiry would examine whether preferential and exclusive Xiaomi product launches on selected e-commerce platforms defeated the intent of India’s FDI policy.
Xiaomi currently ranks fourth in India’s smartphone market with about 13% share, down from 19%. Its India revenue stood at USD 2.52 billion in 2025.
