You need to set the Insertion Scale units in each drawing so that AutoCAD knows what scale factor to apply when inserting.
First open the source drawing and type UNITS at the command line. Set the Insertion Scale units to inches. Close and save.
Next open the destination drawing and set the Insertion Scale units to meters.
In the destination drawing type XR at the command line to start the xref command.
Have you ever worked with two drawings that were drawn to the same units but appear at different locations/scales when one is inserted into the other? In these instances make sure that the insertion scale units are set the same in both drawings. Different insertion units is most likely the reason this is happening.