Krafton, the holding company, has admitted that the data of Indian players was shared with the Chinese server.
Just after the game was launched, a report by IGN India revealed that Battlegrounds Mobile India sent data of Android users to servers in China, including one that belongs to Tencent-the publisher of PUBG Mobile and Microsoft Azure servers in U.S., Mumbai, and Moscow.
IGN claimed this based on the data collected using a data packet sniffer app on an Android smartphone. They found that the servers spotted in the logs were run by China Mobile Communications Corporation - a state-owned Chinese company. This was confirmed by Krafton, which stated that the data was shared outside of the country with third parties to enable the migration of data from the PUBG Mobile Global account to Battlegrounds Mobile India.
However, IGN India has updated that Krafton appears to have released a small update to the game to fix the issue. It seemed that the Indian PUBG does not share data with China servers anymore.