India’s anti money laundering agency raided 40 offices of Vivo, a Chinese phone-maker, in India on Tuesday. The raid was related to allegations of money laundering. This is the latest development in a series that illustrates the increasingly murky relationship between New Delhi (and firms of Chinese origin).
According to local media reports, the Enforcement Directorate searched Vivo offices in Uttar Pradesh, Bihar and Madhya Pradesh. Also Read
It was informed by a Vivo spokesperson that they were cooperating with authorities.
“Vivo India will cooperate with the authorities in providing all information.” We are committed as a responsible corporation to comply with Indian laws,” the spokesperson stated, but did not elaborate on details about ED’s proceedings.
Bloomberg reported that the ED is investigating Vivo’s financial reporting and ownership for several months.(India raids Vivo offices)
The ED also seized $725 Million from Xiaomi India in the same month. They claimed that the company had illegally remitted royalties under the “instructions of their Chinese parent groups entities”.
Reuters reported that Xiaomi denied these allegations and claimed its executive was subject to “physical violence” threats during investigation. The company also challenged the ruling of the enforcement agency in Karnataka High Court. This decision is still pending.
India Cellular and Electronics Association is a lobbying group representing several tech giants like Apple, Google, and Amazon. In May New Delhi urged to intervene and claimed that ED did not understand how royalty payments in the tech business work.
These raids are a result of geopolitical tension between two nuclear-armed neighboring countries.
Over 200 Chinese apps, including TikTokand PUBG mobile were banned by India in mid-2020 due to national security concerns. This was shortly after a skirm at the border of the armed forces from the two countries.
Although South Asia has not officially identified China in its block order blocks, it has avoided any restrictions on Chinese smartphone manufacturers.
Chinese smartphone manufacturers continue to dominate India’s market. According to Counterpoint, four of the five top Indian smartphone manufacturers were Chinese. Vivo is fourth and Vivo is fifth.