Overall revenue from the company's smartphones business, which accounts for nearly two-thirds of its revenue, fell 1.2% to 31.6 billion yuan.
sold 28.3 million handsets in the quarter, down from 32.1 million units a year earlier.
However, sales of premium phones in overseas markets were up by 99.2% year on year, with average selling prices rising 11.8% in that period.
"This shows our smartphones have achieved a major breakthrough in Q2," Wang Xiang, Xiaomi's acting CFO, said on the earnings call.
The company's high-end phone saw "explosive growth" in Europe, where smartphone shipments were up by 64.9%, Wang said.
Profit rose 129.8% to 4.49 billion yuan.
reported an adjusted net profit of 3.37 billion yuan, beating the average market estimate of 2.24 billion yuan, according to Refinitiv data.
Xiaomi has relied increasingly on overseas markets such as India to boost growth as it struggles with competition from Huawei, the market leader in China.
The company's revenue from overseas markets grew 10% year on year in the second quarter, accounting for 44.9% of its total revenue.
While sales in India started to recover as its lockdown was gradually lifted during the second quarter, production constraints have dragged on sales, Wang said. The number of new smartphone activations in July was still 72% of pre-pandemic levels, he said.
Xiaomi has also found itself caught in a backlash against Chinese tech firms in India, where the government last month banned several mobile apps from a range of Chinese companies, including two from Xiaomi.
Wang said Xiaomi remained confident in the India market, saying the company would continue "to promote the mutual understanding and trust between people in India and China."
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