India has raided at least 40 Vivo offices across the country based on money laundering allegations.
The enforcement directorate (ED) has searched the Chinese phone maker’s offices in states like Uttar Pradesh, Bihar, Madhya Pradesh, and Maharashtra. The company has said it is cooperating with the authorities.
However, China is worried that the investigation may be skewed against the company already.
“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,” said Chinese foreign ministry spokesman Zhao Lijian.
The probe comes at a time when India-China relations are severely strained. Border tensions between the two neighbours intensified in 2020. India has since taken several steps to wean consumers away from Chinese products and services. It even banned more than 300 Chinese applications and tightened norms for Chinese investors in India.
India’s crackdown on Chinese smartphone companies
BKK-owned Vivo is not the only smartphone maker to face the heat under these circumstances.
In April, the ED alleged forex violations and seized assets worth $725 million from Xiaomi India, another smartphone manufacturer with roots in China. The company denied these charges. It alleged that its executive faced “physical violence” threats during the probe and has challenged the matter in an Indian court.
The taxmen had earlier probed alleged financial irregularities by Oppo and OnePlus, too.
Such investigations “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,” China’s embassy in India said in a statement.
Indians still love Chinese smartphones
Indians, meanwhile, continue to lap up Chinese phones.
As of April, Xiaomi held the largest share—23%—of India’s smartphone market. Barring South Korea’s Samsung, every other brand in the top five sold in India was Chinese. Four of the five best-selling ones in the country are Shenzhen-based realme’s.