Largest seizure order in India is approved by FEMA authority against Xiaomi

FEMA stated in a statement that the order was issued against Xiaomi Technology India Private Ltd. under Section 37A of the FEMA.

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According to the ED, this is the greatest amount of deposits frozen in India to date, totalling over Rs 5,551 crore, have been ordered seized by the competent authority under the Foreign Exchange Management Act (FEMA).

As required by the law governing foreign exchange crimes in the nation, the Enforcement Directorate (ED) issued the order of seizure on April 29 under the FEMA and then sent it for confirmation to the appropriate authorities.

The central agency stated in a statement that the order was issued against Xiaomi Technology India Private Ltd. under Section 37A of the FEMA.

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“This is the highest amount of seizure order in India which has been confirmed by the authority to date.

“The authority, while confirming the seizure of Rs 5,551.27 crore, held that ED is right in holding that foreign exchange equivalent to Rs 5,551.27 crore has been transferred out of India by Xiaomi India in an unauthorised manner and is held outside India on behalf of the group entity in contravention of Section 4 of the FEMA,” the agency said.

The competent authority also observed that the payment of royalty is nothing but a tool to transfer the foreign exchange out of India and the same is in “blatant violation” of the provisions of FEMA, it said.

Under the brand name MI, Xiaomi sells and distributes mobile devices throughout the nation. Xiaomi India is a fully owned subsidiary of the Chinese company Xiaomi Group.