New Delhi: China on Wednesday expressed hope that India will conduct the ongoing investigations into the mobile manufacturer firm Vivo in accordance with the law and regulations and provide a “truly fair” and “non-discriminatory” business environment to Chinese firms.
Asked about the ongoing raids on Vivo offices in several locations in India, Chinese foreign ministry spokesman Zhao Lijian told a media briefing here that the Chinese side is closely following the developments on this matter.
“As I have stressed many times, the Chinese government has always asked Chinese companies to abide by laws and regulations when doing business overseas,” Zhao said.
“In the meantime, we firmly support Chinese companies in safeguarding their lawful rights and interests,” he said.
“We hope the Indian authorities will abide by laws as they carry out the investigation and enforcement activities and provide a truly fair, just and non-discriminatory business environment for Chinese companies investing and operating in India,” the spokesman said.
The Enforcement Directorate (ED) raided at least 44 places across India on Tuesday in a money-laundering investigation against Chinese smartphone manufacturer Vivo and related firms.
The searches were carried out under sections of the Prevention of Money Laundering Act (PMLA) at locations in several states including Delhi, Uttar Pradesh, Meghalaya and Maharashtra.
The Chinese Embassy in India also issued a statement, saying the “frequent investigations” by the Indian side into Chinese enterprises disrupt the enterprises’ normal business activities and damage the goodwill of the enterprises”. The raids also impede the improvement of the 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”.
The embassy statement added that the essence of China-India economic and trade cooperation is for mutual benefit and win-win results. “The bilateral trade volume between China and India strikes a historical record of over $100 billion in 2021, which reflects the huge potential and broad prospect of economic and trade cooperation between our two countries,” it said.
The Embassy also reiterated that China wishes the Indian side will investigate and enforce the law in compliance with laws and regulations and provide a “fair, just and non-discriminatory business environment for Chinese enterprises to invest and operate in India”.
Several raids against Chinese firms
The action against Vivo is being seen as part of the Union government’s steps to tighten checks on Chinese entities and the continued crackdown on such firms and their linked Indian operatives that are allegedly indulging in serious financial crimes like money laundering and tax evasion while operating in India.
The stepped-up action against the Chinese-backed companies or entities operating in India comes in the backdrop of the military stand-off between the two countries along the Line of Actual Control (LAC) in eastern Ladakh has been ongoing for more than two years now.
The federal agency filed a money laundering case after taking cognisance of a recent Delhi Police (economic offences wing) FIR against a distributor of the agency based in Jammu and Kashmir where it was alleged that a few Chinese shareholders in that company forged their identity documents.
The ED suspects this alleged forgery was done to launder illegally generated funds using shell or paper companies and some of these “proceeds of crime” were diverted to stay under the radar of Indian tax and enforcement agencies.
A Vivo India spokesperson said they’re cooperating with authorities.
The ED in April ordered the seizure of Rs 5,551 crore worth of deposits of Chinese smartphone giant Xiaomi India for alleged contravention of the Foreign Exchange Management Act (FEMA).
A Xiaomi store in China. Photo: Raysonho @ Open Grid Scheduler/Wikimedia Commons, CC0
The Income Tax department raided Chinese telecom company Huawei in February and it claimed to found alleged manipulation of account books for reducing taxable income in India by the company.
Premises of a number of these Chinese smartphone companies including Xiaomi, Oppo and Vivo, their distributors and linked associates were raided across the country by the I-T department in December last year and it later claimed to have detected alleged unaccounted income worth over Rs 6,500 crore due to violation of the Indian tax law and regulations.
Vivo had a 15% market share in the Indian smartphone segment in the first quarter of 2022 with the shipment of 5.5 million devices, according to market research and analysis firm IDC.
According to a Counterpoint research report, Vivo became the top 5G brand in the Rs 10,000-20,000 price bracket segment in the country during March 2022 quarter.
(With PTI inputs)