In a statement provided today, Xiaomi has outlined measures it is undertaking to allay user concerns after it was revealed that devices like the Redmi 1S were sending user data back to the vendor's servers in China.

The concern was raised earlier this month by the Indian Air Force, which advised against using Xiaomi's handsets on privacy grounds. Xiaomi has now mentioned that it will move non-Chinese user data outside the country by the end of 2014, and that a data center would be established in India (among other locations) sometime in 2015. The company announced last week that it was looking into the possibility of a manufacturing facility in India to produce handsets.

In the statement, Xiaomi states that it does not collect any user data without permission, and that services that were flagged for privacy concerns, like Mi Cloud and Cloud Messaging, were now opt-in services.

Here's the statement in full:

There have been reports about an IAF circular claiming that Xiaomi phones are a security threat. While we are attempting to reach Indian authorities to learn specifics, we would like to clarify a few points to assure our users that we treat your privacy seriously.

  1. We provide opt-in secure Internet services that greatly benefit users

We offer various opt-in Internet services that bring great user benefits, are free of charge, and require personal data to be stored in the cloud. For example:

Mi Cloud enables users to back up their data as well as sync it to other devices Cloud Messaging allows users of Mi devices to exchange text messages free of carrier charges by routing messages via IP instead of carrier's SMS gateway These services are optional (opt-in). Users can turn them on and off at any time. Users can also opt to use similar services from other Internet companies instead, such as Google, Whatsapp, Dropbox and others.

  1. We do not collect user data without permission

We do not collect any data associated with services such as Mi Cloud and Cloud Messaging until the user provides explicit consent by turning on the corresponding service(s). Even after users have turned on these services, they can turn them off at any point of time.

We take rigorous precautions to ensure that all data is secured when uploaded to Xiaomi servers and is not stored beyond the time required.

  1. We use very high encryption and security standards to protect user data

We encrypt data using AES-128 standard before storing, which makes it practically impossible for anyone to steal this information We protect user passwords and identifiers such as IMEI number using cryptographic one-way hash functions before they're uploaded, which means we never actually receive the original information No single person, including Xiaomi employees, can decrypt user data stored in Mi Cloud, even if they get access to the hard drives We use extremely strict access control policies with multiple authorizations being required for engineers building services that access any personal data All access to servers is logged and audited 4. We are moving our Indian users' data to servers outside of China, and to India in 2015

Since early 2014, we have been migrating our services and corresponding data for Indian users from our Beijing data centers to Amazon AWS data centers in Singapore and USA. Parts of this migration will be completed by the end of October, and all of it will be completed by the end of 2014. In 2015, we plan to launch a local data center in India to serve the needs of (and store data for) our Indian users.

These efforts help significantly improve the performance of our services and also provide some peace of mind for users in India, ensuring that we treat their data with utmost care and the highest privacy standards.

For detailed information, refer this recent post by Hugo Barra on this.

  1. The concerns raised by F-Secure have been fully addressed

We believe the advisory circular issued by IAF is based on events about 3 months back. It refers to the F-Secure test done on the Redmi 1S in July 2014 about the activation of our Cloud Messaging service (which enables users to send text messages for free, similar to other popular messaging services).

We immediately addressed the concerns raised, which was directly acknowledged by F-Secure 4 days later.

Please refer to this post by F-Secure confirming their concerns were addressed.