China says India risks scaring away investors with raids on its companies

• India’s Enforcement Directorate raided 48 Vivo sites around the nation.
• India has been more strict with Chinese corporations since border tensions with China.
• The Enforcement Directorate claims Vivo committed tax evasion and transferred money illegally.

With its “regular inquiries” of Chinese enterprises, India runs the risk of harming its reputation with foreign investors, Beijing warned this week.

In a statement released on Thursday, the Chinese embassy in India claimed that investigations into Chinese businesses by Indian authorities had disrupted “normal business activities” and had “cracked down on the confidence and willingness of market entities from other countries, including Chinese enterprises to invest and operate in India.”

The criticism follows this week’s raid on major Chinese smartphone manufacturer Vivo on suspicion of money-laundering by India’s Enforcement Directorate, the nation’s primary financial investigation agency.

The Indian agency claimed in a press release on Thursday that it had searched 48 Vivo sites around the nation and had taken 4.65 billion rupees ($60 million) from 119 bank accounts, including fixed deposits, cash, and gold bars.

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The Enforcement Directorate claimed in the statement that Vivo committed tax evasion and transferred 624.8 billion rupees ($7.9 billion), primarily to China.

The statement read, “These payments were made to conceal significant losses in Indian-incorporated entities to avoid payment of taxes in India.”

The agency continued, “The Vivo India personnel, including several Chinese Nationals, did not assist with the search proceedings and had tried to flee.”

The business “is cooperating with the authorities to supply them with all necessary information,” a Vivo spokeswoman in India said on Tuesday.

Xiaomi likewise aimed

Two months after India took more than $700 million from Xiaomi, a major Chinese smartphone manufacturer, there have been searches on the Vivo offices. It was also charged with transferring money unlawfully outside the nation.

“All our operations are firmly compliance with local laws and regulations,” Xiaomi India stated at the time.

According to data gathered by Counterpoint, Chinese phone manufacturers predominate the Indian market, with Xiaomi being the best-selling brand. According to the company, Vivo is also one of the top five brands.

Since the world’s two most populous nations’ border tensions erupted two years ago, India has been more strict with Chinese corporations. India banned more than 200 apps in 2020, including the hugely popular video platform TikTok, many of which were Chinese.

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