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A Huawei sign is displayed during the 10th Global mobile broadband forum hosted by Huawei in Zurich, October 15, 2019. Photo: AFP

China slams New Delhi for ‘suppressing’ Chinese firms after tax raid on Huawei’s India offices

  • Huawei confirmed on Wednesday that India’s tax officials had visited the company’s local offices and spoke to employees
  • China is ‘deeply concerned’ about India’s ‘suppression of Chinese firms’, said Gao Feng, spokesperson for China’s commerce ministry

China accused India of “suppressing” Chinese companies after Indian tax authorities raided the offices of Huawei Technologies Co, which said it would seek more information on the case and “fully cooperate” with local authorities.

In a statement issued Wednesday, the Chinese telecoms giant confirmed that India’s tax officials had visited the company’s offices in India and spoke to employees.

Reuters reported that tax officials had raided Huawei’s offices in New Delhi, the nearby city of Gurugram, and the tech hub Bengaluru.

Huawei said it was confident that its India operation was “firmly compliant with all laws and regulations”.

Huawei to cut dividend payments to employees after expected revenue slump

“We will approach related government departments for more information and fully cooperate as per the rules and regulations and follow the right procedure,” the company said.

The raid is the latest example of India’s tightened scrutiny of Chinese tech companies amid geopolitical tensions between the neighbouring giants.

It also triggered a sharp response from Beijing. China is “deeply concerned” about India’s “suppression of Chinese firms”, Gao Feng, spokesperson for China’s commerce ministry, said on Thursday, without naming Huawei.

“We noticed intensifying concerns about India’s investment environment from foreign investors, including Chinese companies,” Gao said. “We hope that India could foster a fair, transparent and non-discriminatory business environment for Chinese companies in India.”

Last month, India ordered the local unit of Chinese smartphone maker Xiaomi to pay 6.53 billion rupees (US$87.8 million) in allegedly unpaid import taxes.

Xiaomi said it was negotiating with local authorities over the amount to be paid, noting that there was “different opinions on the price determination of imported goods”.

The raid conducted at Huawei’s offices comes days after India banned 54 Chinese apps over security concerns, including those owned by Chinese tech giants Tencent Holdings, NetEase, and South China Morning Post owner Alibaba Group Holding. That is on top of the more than 200 Chinese apps that have been barred from use in India over the past two years.
India is not a significant smartphone market for Huawei, but it is vying for a piece of the 5G network. Photo: AFP
The action by India’s tax authorities could cast a shadow over Huawei’s business prospects in South Asia’s largest economy. The telecoms giant has been vying for a piece of India’s 5G network development, but last May the government excluded Huawei and its Chinese peer ZTE Corp from taking part in the country’s sixth-month trial of 5G technology.

Separately, India is not a significant smartphone market for Huawei. The company accounted for well under 1 per cent of the country’s 161 million smartphone shipments in 2021, according to research firm IDC.