Washington: DJI, the world's largest drone maker, filed a lawsuit against the United States Defence Department on Friday, contesting its inclusion on a list of companies alleged to have ties to China's military.

DJI, which accounts for more than half of US commercial drone sales, argued that the designation is inaccurate and has caused significant financial losses, Channel News Asia (CNA) reported.

The lawsuit, filed in a US district court in Washington, seeks DJI's removal from the Pentagon's list of "Chinese military companies." DJI stated that it "is neither owned nor controlled by the Chinese military." The list serves as a warning to US businesses about the national security risks of engaging with companies identified by the Defence Department.

According to DJI's lawsuit, the company has suffered considerable harm due to the Defence Department's "unlawful and misguided decision." The company claimed, "it has lost business deals, been stigmatised as a national security threat, and been banned from contracting with multiple federal government agencies."

Additionally, the lawsuit noted that both US and international clients have cancelled existing contracts and are refusing to enter into new agreements with DJI, reported CNA.

The US Defence Department did not provide an immediate response to the lawsuit. DJI said it decided to file the legal action after the Pentagon failed to engage with the company over the military designation for more than 16 months. "We had no alternative other than to seek relief in federal court," DJI said.

The addition of DJI to the Pentagon list is part of a broader US government effort to highlight and limit the operations of Chinese companies deemed to pose national security threats, amid rising tensions between the two largest global economies. The Pentagon's list includes major Chinese firms such as aviation company AVIC, chipmaker YMTC, China Mobile, and energy giant CNOOC.

DJI is not the only company challenging the designation. In May, LIDAR (Light Detection and Ranging) manufacturer Hesai Group filed a similar lawsuit. While the Pentagon removed Hesai from the list on Wednesday, it announced that the company would be re-added on national security grounds.

The lawsuit comes as DJI faces increased scrutiny in the US. Earlier this week, DJI confirmed that US Customs and Border Protection had blocked some of its drones from entering the country under the Uyghur Forced Labour Prevention Act, though DJI denied any involvement with forced labour, CNA reported.

US lawmakers have raised concerns over DJI's drones, citing risks related to data transmission, surveillance, and national security, all of which the company disputes. Last month, the US House of Representatives voted to bar DJI's drones from operating in the country, with the legislation now awaiting Senate action.

Meanwhile, the US Commerce Department has solicited comments on potential restrictions that could effectively ban Chinese drones in the US.

This report is auto-generated from a syndicated feed