Xiaomi's enthusiasm for India appears to be waning as regulatory pressures, shrinking market share, and leadership reshuffles weigh on the company's strategic priorities, according to executives familiar with the matter cited by the Economic Times.
Once India's second-largest revenue contributor, accounting for 45% of Xiaomi's global income in 2018, the market now represents only a single-digit share of the company's operations across more than 100 countries in 2025.
Reluctance to invest amid declining profits
The Economic Times reported that Xiaomi's global management is reluctant to commit new investments for future growth in India. One executive explained that there is a general reluctance to invest in future profits due to perceived risk and uncertainty. The global management expects Indian operations to generate profits and reinvest locally, but profits are declining as sales decrease. Marketing expenditure has been curtailed since regulatory scrutiny intensified in 2022, coinciding with an exodus of top leadership and a slowdown in product launches.
Xiaomi has also paused India-specific research and development and delayed launching high-end foldable phones and home appliances like washing machines, air conditioners, and refrigerators. Regulatory changes now require local manufacturing, which the company views as a challenging long-term commitment.
Frozen funds complicate operations
Financial pressures have compounded the operational hurdles. Investigations by Indian authorities, including the Enforcement Directorate and the Income Tax Department, have frozen roughly INR47 billion of Xiaomi's funds. In its 2024 annual report, the company has expressed willingness to engage in settlement talks to release these restricted funds, though uncertainties may affect cash flows and operating results.
Market share tumbles as competitors gain ground
The company's market share has also fallen sharply. In the first quarter of 2025, shipments dropped 37% year-over-year, marking the steepest decline among major smartphone brands, as competitors like Vivo and Oppo gained traction, particularly in the premium segment. Counterpoint Research reports that Xiaomi's smartphones accounted for just 13% of the Indian market in the second quarter of 2025, ranking third in the market, compared to the top position it held for years in India.
Leadership changes have accompanied these challenges. In June 2022, Alvin Tse replaced Manu Kuma Jain as India general manager, returning to India after leading operations in Indonesia. Anuj Sharma, former head of Poco India, was also brought back as chief marketing officer, reflecting Xiaomi's attempt to stabilize operations amid mounting pressures.
Article edited by Jerry Chen
