Hello patskishan,
Just found a way to use Restore feature in Xiaomi.
No need of third party apps or anything.
Use local backup feature as u have used normally. Now you will find that file in MIUI folder, find this folder in both Internal Storage and in SD card (if you have inserted SD card). If SD card used than file will be in MIUI>backup>AllBackup , and if no SD card then the file will be saved in MIUI internal storage (directoty will be same)
((i suggest if u use SD card then also search in both storages in internal as well as SD card, it can go anywhere but generally SD card if used))
Now, alongwith your .bak file you will be seeing a .xml file

This xml file is of huge importance. Copy this also with your .bak file.
When you create a local backup the last folder in which the file is saved, is a folder named after date on which you performed this backup action.
For safety purpose copy the folder as it is i.e. don't change the name of folder having name as date, after copying save it where ever u want (if in Internal, move to anywhere in SD or in computer/ & if already in SD then no problem)
Now take a new Mi phone (or perform format on your old phone depending on your situation),
Now after formatting, go in MIUI folder (either in Internal or SD card ((if used)) ), paste your backup files in MIUI>backup>AllBackup. Now open Local backup feature.
As u open u will be able to see app data files with some MB's. Click that/those file(s). As you click it, a a new page will open with Restore option.
Thanx.