Xiaomi India: Facing the Largest Government Seizure

Xiaomi India, the subsidiary of Xiaomi Group (Xiaomi)—a world-leading electronics giant from China—had grown explosively since entering the country in 2014. However, in April 2022, the Indian Enforcement Directorate accused it of illegal remittance of profits out of the country and, in response, seized a fund of US$669.95 million in the company’s account. This seizure was record-breaking in Indian history, equivalent to nearly half the annual worldwide profits of Xiaomi. To unfreeze the fund was obviously urgent. More importantly, the company had to formulate effective strategies to navigate an increasingly hostile, foreign context that had been strained by the escalating geopolitical conflicts.

This case is suitable for undergraduate- and graduate-level courses that address the complex interactions between business and politics, especially from an international business perspective and with the emphasis on emerging markets. The specific courses and topics this case is fit to deliver are as follows:<br><br><ul><li>International business (international environment, liabilities of foreignness, and extra risk exposure of multi-nationality).</li><li>Global strategy (political risks from host countries and strategies to deal with them).</li><li>Strategic management (macro environment analysis and non-market strategies).</li><li>Public policies (business-government relations).</li></ul><br><br>By analyzing the case with the suggested questions, students can:<br><br><ul><li>Grasp the concept and forms of political risks facing multinational enterprises (MNEs), especially in emerging economies.</li><li>Comprehensively analyze the sources of political risks that span the business, industry, host country, and host-home relationships.</li><li>Understand the political implications of expansion decisions in a foreign market.</li><li>Learn effective strategies for MNEs to mitigate political risks.</li></ul>

• political strategies, political risks, multinational enterprises