China based Xiaomi discontinues financial services business in India

Chinese smartphone maker Xiaomi Corp has discontinued its financial services business in India, less than three years after its launch. The company recently removed the Mi Pay and Mi Credit apps from the local Play Store and its own app store in the country. Mi Pay, which allowed users to conduct transactions on the country's UPI payments network, has also been removed from the NPCI's list of approved UPI apps.

The abrupt shutdown of the financial services division is a setback for Xiaomi India, which dominates the local smartphone market and aggressively expanded its product lineup to boost profits because the hardware division of the company has extremely slim profit margins.

"As part of the annual strategic assessment activity and as a response to enhanced focus on our core business services, we closed the Mi Financial Services in March 2022," the company spokesperson told Reuters.

In March 2019, Xiaomi launched Mi Pay in India. According to company executives at the time, the app had over 20 million registered users in the country that year alone.

Xiaomi is facing investigations in India, its biggest market outside China, for allegedly evading tax authorities.

Xiaomi's assets worth $676 million were frozen in April by India's federal financial crime agency, which claimed the company had sent money abroad illegally while disguising the transfers as royalties.

The Chinese smartphone company, which rejects accusations of wrongdoing, claims the action "effectively halted" operations in its crucial Indian market.

Due to political tensions following a border clash in 2020, many Chinese companies have found it difficult to do business in India.

Since then, India has banned over 300 Chinese apps, including popular ones like TikTok, citing security concerns, and has also tightened rules for Chinese companies investing in India.