China responds to Indian authorities’ raid on smartphone brand vivo’s offices
China’s embassy in the India said on Thursday that multiple probes by the South Asian country’s enforcement authorities against Chinese enterprises undermine the trust of foreign organizations investing and operating in India.
The statement came after the Indian government raided the offices of Chinese smartphone brand Vivo.
On July 5, the Enforcement Directorate raided at least 44 places across India in a money-laundering investigation against Vivo and related firms.
According to Reuters, in the investigation, the federal agency alleges the company remitted almost 50% of its total sales of 1.25 trillion rupees ($15.82 billion) to China “in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India”.
Notably, this is not the first time Indian officials have conducted a raid on Chinese companies. Previously, Economic Times reported on December 31, 2021 that Indian tax department raided Xiaomi and Oppo, accusing the two Chinese smartphone makers of violating laws on non-disclosure of related party transactions.
In addition to being under investigation since February, Xiaomi had $725 million in its India bank accounts frozen in April after the Enforcement Directorate alleged it had made illegal remittances abroad “in the guise of royalty” payments. Xiaomi denies wrongdoing and an Indian court has temporarily lifted the block following a challenge by the company. The case is ongoing.
Beijing is also closely watching the raid on Vivo. “The frequent investigations by the Indian side into Chinese enterprises not only disrupt the enterprises’ normal business activities and damage the goodwill of the enterprises, but also impedes the improvement of business environment in India and chills the confidence and willingness of market entities from other countries, including Chinese enterprises to invest and operate in India,” Zhao Lijian, a spokesman for China’s foreign ministry, said at a briefing on Thursday.
China wishes the Indian side to investigate and enforce the law in compliance with laws and regulations, and effectively provide an fair, just and non-discriminatory business environment for Chinese enterprises to invest and operate in India.
Xiaomi is the largest smartphone maker in India with a 24% market share, followed by Samsung Electronics with 18% and Vivo with 15%, according to Counterpoint Research.
As geopolitical risks rise, Chinese companies may face increasing challenges in India. In the past year, citing national security concerns, India banned hundreds of Chinese apps, including ByteDance’s TikTok, Tencent’s WeChat, and Alibaba’s UC Browser.