Under the FEMA, ED assesses the Rs. 5,551 trillion in gross worth of Xiaomi India deposits

Under the FEMA, ED assesses the Rs. 5,551 trillion in gross worth of Xiaomi India deposits ...

The Federal Reserve (FEMA) has approved a confiscation order of over Rs. 5,551 crore worth of Xiaomi deposits, the highest amount permitted till today in India, according to the ED on Friday.

The Enforcement Directorate (ED) had made the seizure on April 29 under the Federal Reserve and sent it to the competent authority as per the country''s foreign exchange laws.

In a statement, the federal agency said the order had been filed under Section 37A of the Federal Trade Commission against Xiaomi Technology India Private.

Under the provisions of FEMA, the Competent Authority has confirmed the confiscation order of Rs. 5551.27 Crore, passed by the ED against Xiaomi Technology India Private Limited.

"This is India''s highest amount of seizure order, which has been verified by the authorities till today."

"Division, while confirming the saisge of Rs. 5,551.27 crore, said that ED is correct in holding that Xiaomi India''s foreign exchange equal to Rs. 5,551.27 crore has been shipped out of India in an unauthorised manner and is held outside India on behalf of the group entity in violation of Section 4 of the Federal Trade Commission."

According to the competent authority, royalty payments are just a way to transfer foreign exchange out of India, and that it is in "blatant violation" of the laws of FEMA.

Xiaomi is a trader and distributor of mobile phones in the United States under the brand name MI, and Xiaomi India is a Chinese-owned subsidiary.

Xiaomi received three showcase notices with an approximate duty liability of Rs. 653 crore, of which it had only submitted Rs. 46 lakh to the parliament, according to Finance Minister Nirmala Sitharaman.

In connection with illegal remittances made by the company in February this year, ED secured Rs. 5,551.27 crore in Xiaomi Technology India, a fully-owned subsidiary of China-based Xiaomi group under the Foreign Exchange Management Act (FEMA).