Shot-in-the-arm for Xiaomi as India-China ties improve; premium push gathers pace

India, the only major market for Xiaomi to report a sales contraction in the September quarter, would get more resources this year as New Delhi-Beijing ties improve and local consumers buy more premium products, two top visiting executives at the Chinese company told ET.

“The last three to four years, a lot has happened, a lot has changed, but what hasn’t changed is Xiaomi’s attitude and emphasis on the strategic importance of this (India) market,” said Alvin Tse, Vice President at Xiaomi Global. “We have really seen the progress of India as an economy and as a consumer market,” Tse said, addressing the media on the sidelines of Xiaomi’s first product launch of the year in India.

About Rs 4,820 crore of Xiaomi's funds in India have been frozen over allegations of improper royalty remittances and customs duty evasion. The company, however, maintains it complies with local laws, though global executives have warned investors that the unresolved cases could significantly impact the company's financial performance and cash flows.


This regulatory overhang has coincided with the company losing market share in the highly competitive smartphone segment, despite overall revenue growth driven with the sale of more premium handsets.

Adam Zeng, Senior Vice President and the President of the International Business Department, has accompanied Tse on the visit to India. Both executives are meeting retailers, distributors, manufacturing partners and the local leadership team. They have no plans to meet the government, the company said.

The executives have also brought go-to-market leads from its headquarters to evaluate which of the over 200 product categories Xiaomi has in the China market can be brought to India, amidst the India unit’s focus to expand its non-phone categories due to an overall slowdown in smartphone sales.

“This year (2025), we pivoted more from a volume to a value share strategy. The revenue is still growing by 7-8% year-on-year,” said Sudhin Mathur, chief operating officer, Xiaomi India.

He added that the company currently has about 140 million monthly active users in India, and that it will look to leverage to sell more non-phone products this year.

Beyond Handphones

The non-phone categories will include products such as a robot vacuum cleaner, air purifiers and other AI-based Internet-of-Things (AIoT) products.

“There are two aspects..one is going deeper into the category, the other is to go wider with more categories. For that, we will have to look at the market, what kind of localisation is needed, BIS is also another factor, 2026 is the start of that journey,” Mathur said.

Xiaomi is increasing the localization of product manufacturing in India, currently assembling all phones, tablets, TVs, and wearables sold there. However, unlike rivals Samsung and Apple, who are ramping up exports from India using policies like the production-linked incentive scheme, Xiaomi has no immediate export plans.

It is also open to sourcing more components from India following approvals of companies in the Electronics Components Manufacturing Scheme, which includes Xiaomi’s manufacturing partner – Dixon Technologies. Local sourcing has gone up from 5% in 2017 to 35% of non-semiconductor parts, especially in the handset segment.

Amidst the ongoing memory supply crunch, the company does not foresee demand being hit since most customers are now purchasing phones using financing options, spreading the cost over a few years. It expects some impact at the lower tier price points, but not so much in the mid to high-end segments.

“We just announced our price changes and actually on a relative level, it is less than many of our counterparts. We are absorbing as much as we can, taking it on a case by case basis if and when there is a need and there is something that we can’t absorb further,” Mathur said.