India’s air force has grounded smartphones made by Chinese high-flyer Xiaomi

No Xiaomis for you, soldiers.
No Xiaomis for you, soldiers.
Image: Reuters/Parivartan Sharma
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No matter what is said on the high-tables of diplomacy about cross-border trade and investment, India hasn’t always been entirely comfortable with the activities of high-profile Chinese technology companies.

The latest suspect is China’s number one—and the world’s fifth largest—smartphone maker, Xiaomi, which is trying to make inroads into India’s booming mobile phone market.

The Indian Air Force (IAF)—among the largest in the world—has asked its personnel and their families to avoid using Xiaomi Redmi 1S smartphones. It fears that the Chinese smartphone-maker may be accessing personal user data and storing them on its servers in Beijing, The Economic Times reported. The IAF’s directive is based on tests run by F-Secure, a Finnish security firm, on Redmi 1S.

Xiaomi, however, says that there is nothing to worry about, though it hasn’t officially heard from the IAF or the government yet.

“We take rigorous precautions to ensure that all data is secured when uploaded to Xiaomi servers and is not stored beyond the time required,” Manu Jain, Xiaomi’s India head, wrote in an email. “Strict encryption algorithms are implemented to protect user privacy.”

“As far as we know, our cloud service is 100% compliant with all legal regulations internationally, including India. We are willing to meet with the authorities to resolve any concerns that they might be having,” he added.

Xiaomi had a blockbuster opening in India this July, after unseating rival Samsung from the number one position in China. The company tied up with e-commerce giant Flipkart in India selling its smartphones through flash sales, selling more than 400,000 handsets so far. The company is hosting its eighth such flash sale on 28 October—and is reportedly also considering manufacturing its phones in India after posting strong sales.

In August, F- Secure found the Redmi 1S smartphone sent the call history, text messages, name of the telecom operator, the IMEI number and the phone number back to Xiaomi’s servers, currently located in China.

Xiaomi was quick to react and came out with a software update that prevented involuntary transfer of user data to its servers. However, the Chinese handset-maker continues to store user information on Mi Cloud—its cloud service—similar to Apple’s iCloud.

Within days of the F-Secure test, Hugo Barra, Xiaomi’s vice president of international operations, said the company was in the process of transferring user data stored in its servers in Beijing to California and Singapore for better speeds.

“Users are already experiencing website speed boosts of at least 30% in markets such as Singapore, Hong Kong, Taiwan and as much as 200% in India,” Barra said in a post on his Google Plus page. Eventually, the company plans to transfer the data of its Indian users in servers hosted in India, Jain adeed.

This isn’t the first time India has expressed its concerns over Chinese telecommunication companies. In February 2014, India began investigating Huawei on suspicion of hacking into the telecom networks of Bharat Sanchar Nagar Nigam (BSNL), India’s state-run phone company.

The government had similar reservations about  ZTE, another Chinese telecom gear provider, in 2009 and 2010, and asked BSNL not to purchase equipment from the company. Huawei and ZTE are among the cheapest telecom equipment suppliers in India.

“User privacy is one of the biggest issues worldwide,” said Tarun Pathak, senior analyst at Counterpoint Research, a technology market research firm. ”Storing is not an issue but where and how is the data is being used, that’s the main question.”