Xiaomi’s dominance in India’s smartphone market is fading fast. Once the country’s best-selling brand, the company is now dealing with sliding shipments, frozen funds, and growing pressure from regulators — a mix that’s making it harder for the Chinese tech giant to hold on to what was once its second-biggest market.

Industry tracker IDC says Xiaomi’s shipments in India fell 23.5% year-on-year in the second quarter of 2025, pushing it out of the top five vendors. Rival brands Vivo and Oppo have taken advantage, particularly in the mid-to-premium range, where Xiaomi has struggled to compete.

The problems run deeper than just weak sales. Investigations from the Directorate of Revenue Intelligence, Customs, Income Tax, and the Enforcement Directorate have tied up more than ₹4,700 crore of company funds. That has fueled a “high-risk” image in the eyes of investors and made the outlook for the business even tougher.

Executives and analysts also point to Xiaomi’s reduced marketing push since 2022 and the departure of key leadership figures. Unlike its competitors, the company has leaned heavily on global models with little customization for India, a strategy that hasn’t clicked with buyers who now have more choices. Delays in bringing foldable phones to the market and the halt of India-specific R&D have only added to the slowdown.

Back in 2018, India accounted for about 45% of Xiaomi’s global revenue. Today, that’s down to a single-digit share. Unless the company finds a way to resolve its regulatory battles and reconnect with local consumers, its decline in India may only accelerate.

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