India demanded a local branch of China’s Smartphone maker XiaomiFollowing an investigation, the import tax bill was reduced to 6.53 billion Rupees (or $7.8 million).

A probe was conducted by the Directorate of Revenue Intelligence, which resulted in documents being recovered during searches of premises at Xiaomi India. a Finance Ministry statementThis was Wednesday.

“During investigations, it was further revealed that Xiaomi India paid the “royalty-and-licence fee” Qualcomm USAIt stated that the transactions value of goods imported from Xiaomi India by its contract manufacturers and Beijing Xiaomi Mobile Software Co. Ltd. were not included in this transaction.

The statement stated that Xiaomi India had evaded customs duties by not including a ‘royalty’ and licence fee to the transaction value. This was because it is the beneficial owner for such imported phones and the components.

The DRI completed the investigation and issued three notices of “show cause” to Xiaomi regarding the collection of 6.53 million rupees between April 2017 to June 2020. These notices are a type of court order that requires one or more of the parties to a case to justify, explain or prove something to the court.

CNBC did not reach Xiaomi for comment.

India isn’t the only country to take action against Chinese technology firms.

The South Asian country was last year banned 118 appsWith China and cite national security threats. The decision was made at the height geopolitical tensions between China and India.