Xiaomi to remain 100% subsidiary of Chinese parent, not tying with any Indian firm: Report

Chinese smartphone maker Xiaomi has said that it will not dilute its shareholding in India by joining hands with a local company to support the Centre’s ‘Make in India’ initiative unlike other foreign firms like MG Motors and BYD, a report said on Monday.  

Muralikrishnan B, president of Xiaomi in India, told Times of India, that the company is not looking at any joint venture with any Indian firm, in a bid to avail of production-linked incentives (PLI) that the government has offered to make smartphones. 

“We will remain a 100 per cent subsidiary of our Chinese parent,” Muralikrishnan said.  

"The company is not looking at the option of a joint venture in India even as some of its Chinese peers, such as those in the auto space like MG Motors and BYD, are eyeing the route to overcome the problems of getting more equity to support their venture," Muralikrishnan told TOI.

Xiaomi has recently signed with Noida-based manufacturing firm Optiemus Electronics to source audio products, while it already makes televisions in the factory of Dixon Technologies. 

Recently, Chinese carmaker BYD and Hyderabad-based Megha Engineering and Infrastructures submitted a proposal to the Department for Promotion of Industry and Internal Trade (DPIIT) to set up a $1 billion four-wheeler manufacturing facility in Hyderabad.  

BYD, the world's largest electric vehicle maker by sales, in its proposal had pitched to manufacture 10,000-15,000 electric cars a year. Megha Engineering and Infrastructures was putting up the capital while BYD was contributing with technology and know-how. 

But BYD’s proposal was rejected by the Centre on national security concerns. The use of Chinese homegrown technology is a concern, news reports said. 

Xiaomi’s GST evasion 

Recently, the Centre said that Chinese handset makers, such as Xiaomi, Realme, Oppo, Vivo, and Oneplus, have evaded GST of Rs 1,108.98 crore and custom duties of Rs 7,966.09 crore in the last five years till 2023-24.  

In a reply to an unstarred question in the Rajya Sabha, Rajeev Chandrasekhar, minister of state for electronics and IT, said the data is between 2017-18 and 2023-24 (up to July 1). Show cause notices have been issued to these companies and investigation has been initiated, he said in his reply to questions raised by Narain Dass Gupta, MP, Rajya Sabha.   

Chandrasekhar, in his reply, said Xiaomi India has been issued multiple show-cause notices for customs duty evasion in FY20, FY21, and FY22, adding to a cumulative amount of Rs 682.51 crore, of which the government has recovered Rs 10.76 crore.  

The company also paid Rs 31.77 lakh in interest and penalty of Rs 13.3 lakh in FY20 for evading customs duty. 

The company is also being investigated for GST evasion from 2017 to July 2023 to the tune of Rs 168.63 crore, with Rs 82.04 crore recovered by the government so far, the minister said. 

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