In May 2022, Xiaomi was frozen by the Indian authorities for 4.8 billion yuan of assets on suspicion of money laundering, and Xiaomi, which had worked hard in India for 10 years, was laundered overnight, with only 37,000 yuan left in the account. Turning over India's investment ledger, you can find that India treats foreign companies indiscriminately, whether you are a Fortune 500 company, a little-known small enterprise, or a European, American or Chinese, the main focus is on treating everyone equally, which truly embodies the Indian concept of "India makes money and India spends, and don't want to take home a penny".
After the Xiaomi incident came out, some people thought that India was targeting Xiaomi, but those who know India know that what happened to Xiaomi is just a microcosm of what 2,800 multinational companies have encountered in India.
The pig slaughter plate is the most characteristic economic phenomenon in India. From the refusal to pay the final payment for the purchase of the French Rafale fighter jet, to the whitewashing of Xiaomi, it is just a drop in the ocean.
In 2007, India fined Vodafone $2.1 billion for alleged tax evasion, including $1.2 billion for Li Ka-shing personally. Vodafone didn't know what to do at first, and it dragged on until 2019, when the fine had risen to $5.1 billion.
Vodafone then took it seriously and appealed to the International Court of Arbitration. The Court of Arbitration ruled in favor of Vodafone on the grounds that the law did not apply retroactively. As a result, India amended its domestic laws overnight and created a new type of tax - retroactive tax.
In 2008, India fined Microsoft another 7 billion rupees for the same reason. In the following years, Nokia, Samsung, IBM, BMW, Wal-Mart, Amazon, Google and other multinational companies were fined successively, with the least BMW fined $100 million and the largest Wal-Mart fined $1.35 billion, directly announcing their withdrawal from the Indian market.
Walmart is not the only multinational company that has announced its exit from the Indian market, but as many as 1,700. Some were penalized like Walmart, and there were other reasons, such as Wistron.
Wistron is a Taiwan-funded enterprise that has invested in India for 15 years, and although the company has not been fined, its person in charge said that in the past 15 years, Wistron's net profit has been infinitely close to zero, which is equivalent to 15 years of work in vain, and all investments have been wasted. Another Taiwanese-funded company, Foxconn, also announced its withdrawal.
At that time, India fooled Foxconn to invest and promised 1 to 2 matching funds, and Foxconn invested $6 billion, but the $12 billion promised by India was nowhere to be found. Not only that, but the factory was also robbed many times, and the loss of property was as high as 40 million yuan.
Apple has been fined $160 million in India for violating fair competition, and the phone's backpad has a yield rate of only 44%. NONE OF CHINA'S THREE MAJOR MOBILE PHONE MAKERS WERE SPARED, WITH XIAOMI BEING FROZEN AT 4.8 BILLION YUAN, OPPO AND VIVO ALSO FINED $550 MILLION AND 1.9 BILLION YUAN, RESPECTIVELY.
Why did India do this? Isn't this killing chickens and eggs? Who will dare to invest in India after doing this?
Because India has no choice, if it doesn't do this, the country will immediately go bankrupt. In the 77 years since the founding of the country, India has had a trade deficit for 75 years. The deficit was $193.4 billion in 2021, soared to $313 billion in 2022, and fell to $239 billion in 2023, but curiously, India's foreign exchange reserves still have $440 billion.
Where does this money come from? There are four main sources, namely overseas remittances, power gates, international borrowings, and overseas investment.
India now has 32 million people working overseas, and the annual remittances are almost $100 billion, and the electric gate industry can bring about $30 billion in foreign exchange earnings to India every year, about $50 billion a year in borrowing, and about $80 billion a year in overseas investment.
[India's electric brake industry is one of the best in the world]
After all, India has a market of 1.4 billion people, a young and strong labor force of 1 billion people, and a low wage of 2,000 yuan on average. It's just that the sum of these three items is still not enough to cover the deficit, so we can only rely on killing pigs.
Of course, there are also sensible investors, such as Elon Musk. In the face of India's invitation to build a factory, Musk praised India, but did not invest a penny, after all, Twitter was fined 5 billion rupees by India is not far away.
Now for India, there is only one choice between bankruptcy and pig slaughter, and if you give up the pig slaughter, you will immediately go bankrupt. It's just that there will always be a time when this drumming will be played to the last stick, and it will be up to India to deal with it.