Concerns among Indian authorities on the safety of the smartphone users' data made by Xiaomi are the latest in a string of security issues related to Chinese firms that are active in the Indian market.
Chinese companies and consortiums with Chinese links have already been barred from bidding for contracts to build Indian ports and in February this year, the previous UPA government had accused Chinese telecom equipment maker Huawei of allegedly hacking state-owned BSNL's network.
Heavy engineering and technology firms, especially those with connections with China's military establishment, have always been viewed with suspicion in India. Chinese firms like Huawei, ZTE, Cosco and ZPMC have all been the subject of security concerns. ZPMC was one of the firms affected by India's rules barring Chinese companies for port projects.
In February, former minister of state for communications and IT Killi Kruparani informed the Lok Sabha that an incident of alleged hacking of Bharat Sanchar Nigam Limited's network by the Chinese telecom company Huawei had come to the government's notice.
"The government has constituted an interministerial team to investigate the matter," Kruparani said in a written reply in parliament without giving details. In 2013, reports had suggested that a BSNL mobile tower in Andhra Pradesh had been hacked by engineers of a Chinese firm. Concerns had also been expressed when BSNL awarded a major part of its network expansion tender, covering 10.15 million lines to ZTE, another Chinese company, in 2012.
Huawei was also a contender for this tender. With Chinese companies emerging as the biggest suppliers of hardware and software to Indian telecom firms, a parliamentary panel had recommended in 2012 that the government should test the telecom equipment for security. The committee also suggested that India should consider the US model of auditing telecom equipments that can have serious security implications.