The Indian tax department suddenly searched a number of Chinese enterprises, experts: the suppression of Chinese enterprises is mainly driven by politics

Source: Global Times

[Global Times reporters Wang Yi, Yang Sheng, Zhang Hongpei] The Indian government has once again attacked Chinese enterprises. According to India's "Business Standards" reported on the 23rd, the Indian Ministry of Finance's Taxation Bureau on the 21st and 22nd in a major crackdown on all-India mobile phone manufacturers and distributors, from the Greater China region of mobile phone manufacturers Xiaomi, OPPO, OnePlus, Foxconn and other offices and manufacturing plants in India conducted a raid.

Image source Visual China

The raid began on the evening of the 21st and involved more than 20 places, including Delhi, Mumbai, Chennai, Bangalore, Kolkata and Guwahati. The first to be searched were several offices of Redmi, OPPO and Foxconn near the Scribübbud Industrial Park. According to India's "Economic Times" reported on the 23rd, the raid operation continued until the night of the 22nd, when the Tax Bureau announced the operation. According to people familiar with the matter, the factories, warehouses, offices of the above-mentioned companies, as well as the residences of some company executives, as well as some distributors of these companies, are within the scope of the raid. Executives at some companies in India were also questioned.

According to the Economic Times, an Indian official claimed that there was "reliable intelligence" showing that the Chinese companies were hiding income and avoiding taxes and making false accounts, and some companies had losses on their books but were actually profitable. According to the Business Standards newspaper, some fintech companies are also within the scope of the search operation.

A Xiaomi spokesperson responded on the 22nd, "As a responsible company, we attach great importance to ensuring that we comply with all laws of India. As an investment partner in India, we are fully cooperating with the relevant Authorities in India to ensure they have all the information they need. OPPO also said in a statement, "As an investment partner in India, we have a high degree of respect and compliance with Indian laws." We will continue to cooperate fully with the relevant departments in accordance with procedures. According to the Global Times reporter, OnePlus has not responded to this, and Foxconn said it is understanding the situation.

This is not the first time Chinese companies have encountered such raids. In August, ZTE's offices in India were raided and its executives were questioned on suspicion of tax evasion, according to the Business Standard newspaper. Shortly after clashes between Indian and Chinese forces in the Galwan Valley region last year, India's tax authorities searched more than a dozen sites linked to Chinese, claiming that several Chinese and their partners were suspected of laundering money through shell companies.

Lin Minwang, a researcher at the Institute of International Studies of Fudan University, said in an interview with the Global Times on the 21st that India's crackdown on Chinese-funded enterprises is mainly driven by politics. "Closing the door and killing pigs" is a very traditional practice in India, and in the past, when India and Europe and the United States had bad relations, European and American companies had similar experiences, and many companies withdrew from India. Lin Minwang analyzed that on the one hand, this is because india's economic situation is not good, on the other hand, some people in India encourage economic decoupling with China, and they don't care whether Chinese companies are interested in the Indian market. Lin Minwang said that overall, the current business environment facing Chinese-funded enterprises in India is relatively poor, and this kind of tax investigation is ostensibly in line with laws and regulations, but its political and economic intentions have been obvious, and the methods are also very clumsy, so Chinese-funded enterprises need to operate more standardized in the future and do not let the Indian side find an excuse to crack down.