Authorities in India seized $725 million from Xiaomi’s local bank accounts after a study discovered the Chinese smartphone company illegally moved money abroad under the guise of royalty payments, according to authorities.

The money was taken from the company’s local arm when it was discovered that it had made transfers to three foreign-based organizations, according to India’s financial crime investigations agency, which began probing the company in February.

“Such huge amounts in the name of royalties were remitted on the instructions of their Chinese parent group entities,” the Enforcement Directorate said in a statement.

Xiaomi did not respond to an AFP request for comment right away.

In December, the firm’s India branch was raided as part of a separate inquiry into possible tax cheating.

At the time, several Chinese smartphone manufacturers, such as Huawei, had their Indian offices examined.

Since a deadly Himalayan border battle involving soldiers from both nations in 2020, relations between New Delhi and Beijing have been at an all-time low.

Following the incident, India’s home ministry banned hundreds of Chinese-made smartphone applications, including the famous social networking platform Tiktok.

The administration justified the app prohibitions by claiming that they were necessary to protect India’s sovereignty.

Since the deadly army encounter in 2020, anti-China sentiment has increased in India, prompting demands for consumer boycotts of Chinese goods.

According to media sources, China is India’s most important economic partner, with bilateral trade worth more than $125 billion last year.