Indian regulators are considering an in-depth investigation into Xiaomi and related entities over fund flows, beneficial ownership, foreign-investment compliance and possible control of local sellers or launch partners. A memorandum drafted in May by an agency under the Ministry of Corporate Affairs recommends examining whether Xiaomi disclosed and secured approval for direct or indirect ownership and control, including investments made after India tightened scrutiny of Chinese capital following the 2020 border conflict. The review would also assess whether priority or exclusive product launches on Amazon and Walmart’s Flipkart circumvented foreign e-commerce rules. Xiaomi said it has not received any formal notice or communication from the Serious Fraud Investigation Office and has always complied with local law. The proposal has not entered the formal case-registration stage and remains under government review, with authorities able to approve, reject or seek a joint review. The potential investigation follows a 55.51 billion-rupee ($584 million) freeze of Xiaomi’s Indian bank assets since 2022 over alleged illegal remittances, which the company denies, as well as tax and royalty disputes. Xiaomi’s Indian smartphone share has fallen to 13% from 19%, leaving it in fourth place, while 2025 revenue in the country declined 40% from its record level three years earlier to $2.52 billion. The memorandum’s disclosure comes as Chinese President Xi Jinping is expected to visit India for a BRICS summit, adding sensitivity to the regulatory and economic backdrop.