The announcement came after a US federal judge temporarily blocked the Department of Defense from forcing American investors to divest from Xiaomi on the grounds the company has ties to China’s military.

FTSE Russell deleted Xiaomi from its indexes on March 12.

A federal judge has blocked enforcement of the US investment ban on Xiaomi calling the decision to blacklist the Chinese technology giant “deeply flawed”.

Ordering a temporary halt to the ban last week, Judge Rudolph Contreras cast doubt on the Pentagon’s decision in January to designate Xiaomi as a company with links to the Chinese military.

"Xiaomi is a publicly-traded company that produces commercial products for civilian use, is controlled by its independent board and controlling shareholders, and is not effectively controlled or associated with others under the ownership or control of the PRC or its security services”, the judge said in the opinion, using the abbreviation for the People’s Republic of China.

Xiaomi said it was pleased with the judge’s ruling and said it would seek permanent removal of the investment ban. 

The decision blocked Americans from investing in the company, the world’s third-largest seller of smartphones. The designation took many company observers by surprise, given the company’s heavy focus on consumer electronics. The company, which denies any military links, filed a lawsuit in the US District Court in Washington, DC, seeking to overturn the designation.

The decision is another courtroom setback in the Trump administration’s campaign against China’s technology sector. Last year, two federal judges issued temporary halts to a ban on US downloads of the Chinese social-media app TikTok, saying the US overstepped its authority.