India and China are in a standoff again, but it isn’t at the border. India is investigating Chinese smartphone maker Xiaomi’s local subsidiary for alleged illegal royalty payments to foreign entities. Xiaomi has denied any wrongdoing and has complained to the courts that India’s financial crime-fighting agency used threats of physical violence to extract confessions, according to Reuters.
The relationship between Asia’s largest and third-largest economy is nothing if not acrimonious. But the high drama conceals significant bilateral dependency on both sides—particularly in the cellphone sector. This latest spat is unlikely to derail a mutually beneficial relationship unless Indian courts take a nakedly political stance against Xiaomi.
