India’s revenue ministry has taken action against the scams it says originated in China.
The Department’s Enforcement Branch on Wednesday raided 48 premises belonging to Vivo Mobiles, the Indian outpost of the smartphone seller which, according to Counterpoint Research, holds 15% of the Indian smartphone market.
The reason for the raids was the Department’s belief that Vivo had transferred approximately $8 million to China, “in order to disclose huge losses in incorporated Indian companies to avoid paying taxes in India.”
The Department also seized 119 bank accounts, lots of cash and two kilograms of gold bars.
The Chinese Foreign Ministry has acknowledged the raids and called Indian authorities to “provide a truly fair, just and non-discriminatory business environment for Chinese companies investing and operating in India”.
The raids follow the May 2022 seizure of $725 million from the Indian presence of Chinese gadget maker Xiaomi, on the grounds that it had also funneled money inappropriately to China.
In June 2022, the Department also disclosed that it was investigating Vivo and Chinese telecommunications equipment maker ZTE.
Investigations into the two continue, as do investigations into a handful of financial services apps that offered predatory lending using funds the Department said came from sources in China.
New Delhi alleges the apps offered short-term loans, sometimes on punitive terms, and Chinese lenders profited from their actions to the tune of $120 million.
The Department seized millions it said were destined for China and revoked the licenses of some of the companies that released the loan applications.
The two actions mark a new skirmish in the strained relationship between China and India, which has soured since India banned hundreds of Chinese apps. He justified the bans as protecting the privacy of citizens.
The two nations also clashed, literally, over their common but ill-defined Himalayan borders. The foreign ministers of the two countries met this week and agreed to settle the problems at the border. Cellphone makers with gold bars in the office might be harder to figure out. ®