Smartphone firms may tweak royalty payment pacts for India

New Delhi: The scrutiny around royalty payments could force global smartphone firms, including Chinese companies, to relook at their agreements with patent holders to include conditions for regional subsidiaries to pay their share to avoid any probe by Indian authorities, said legal experts.

They say the Enforcement Directorate’s investigation into Xiaomi India’s royalty payments has larger implications for overseas companies including rival Chinese ones, creating an uncertain environment, and could hurt the larger electronics manufacturing ecosystem.