In July this year, ED raids on more than 40 locations of smartphone maker Vivo, highlighted the government’s crackdown on Chinese brands. The agency accused that Vivo had transferred Rs 62,476 crore in the name of royalties to China, in order to evade taxes in India. But the brand’s woes aren’t ending, since the Indian government has held up its shipment of 27,000 smartphones bound for neighbouring markets.
Chinese brands under pressure
The total value of the handsets stopped by the revenue intelligence unit is reportedly $15 million, and the action has been taken based on misdeclaration of device models. The industry lobby India Cellular and Electronics Association has urged the tech ministry to intervene and stop the unfortunate course of action. Chinese smartphone firms such as Vivo and Xiaomi have been under fire from Indian authorities since 2020, when border tensions flared up between India and its neighbour.
Part of money laundering probe
Vivo has also faced seizure of Rs 465 crore from 119 bank accounts after raids in July, and a Rs 25 lakh fine for violating GRAP regulations. Along with it, Xiaomi has also faced charges of money laundering and a seizure of assets worth more than Rs 5,000 crore, for transferring money out of India illegally. The firms have amped up manufacturing in India to avoid trouble amidst Indo-China tensions, and Vivo has started exporting made in India smartphones to other markets in the region.
Its peer Xiaomi also reiterated its commitment to make phones in India by locally manufacturing 99 per cent of its devices sold in the country.
