Chinese mobile phone brands sold in local shopping malls in India India's "tax investigation storm" has sprung up again, this time targeting China's telecom giant Huawei. On the morning of February 17, Huawei told the first financial reporter, "we have learned that the Indian income tax department has visited Huawei's office and met with some employees." Huawei said it would contact relevant government departments for detailed information and fully cooperate in accordance with relevant rules, regulations and procedures. According to local media reports in India, the Indian tax authorities searched several places of Huawei in the country on the 15th. The raid involved Huawei's business premises in New Delhi, the capital satellite city of gurgram and the Indian science and technology center of Bangalore. Last year, a series of Chinese brand mobile phone manufacturers, including Xiaomi, oppo and Yijia, were "recruited" in the first wave of "surprise tax investigation" by the Indian government. "Tax investigation storm" affected many Chinese Enterprises After blocking 54 Chinese apps on the grounds of national security and privacy issues, Indian tax authorities searched several offices of Chinese telecommunications equipment manufacturer Huawei in India. It is reported that as part of the tax evasion investigation against Huawei's Indian business and overseas transactions, officials checked financial documents, books and company records. Some documents and records were taken away. For this "surprise inspection", Huawei told reporters this morning that it believed that the company's operation in India strictly complied with all laws and regulations. Industry insiders believe that Chinese enterprises are currently described as "frightened" in India. Compared with the epidemic and production organization, the inexplicable inspection by the local tax department has made the normal operation of many companies passive. "Reports against Chinese funded small and medium-sized enterprises occur from time to time, and are reported by resigned translators, financial personnel and human resources managers. There are quite a lot of such reports. Chinese funded enterprises are worth pondering and seeking solutions in terms of employment." Yang Shucheng, Secretary General of Indian Chinese funded mobile phone enterprises association, told reporters. Yang Shucheng told reporters that there are many reasons for checking enterprises. One is tax inspection. This kind of inspection is carried out by government units above the municipal level or the highest tax officials at the prefecture level. The collection and inspection is relatively civilized, but the amount of fines is relatively high, such as the fines of Xiaomi and oppo (very high). The other is the related investigation reported by Indian employees, such as the visa of Chinese employees and labor disputes. This kind of investigation is mainly conducted jointly by multiple units. It is relatively barbaric. It directly surrounds the factory, restricts access, and the police bring guns to the door. Similar situations occur in at least five or more enterprises. On the evening of December 21 last year, law enforcement officers of the tax bureau of the Indian Ministry of Finance carried out a nationwide tax investigation, involving a number of mobile phone companies. In January this year, the Indian Ministry of Finance issued a statement requiring Xiaomi India to pay taxes of INR 6.53 billion (about 560 million yuan). The Indian Ministry of Finance said that in the investigation, it was found that Xiaomi India did not include the patent license fees and royalties paid to Qualcomm and Beijing Xiaomi mobile software company in the import value declaration, and reduced the value of the goods, in violation of India's customs law. The Department has issued three notices to Xiaomi India to pay the tax omitted between April 1, 2017 and June 30, 2020. However, Xiaomi said that the root cause of the tax problem this time is that there are differences in the determination of the price of imported goods. It is a complex technical problem in all countries whether the royalties, including patent license fees, should be included in the price of imported goods. Chinese companies are worried about the business environment in India Chinese enterprises are becoming an important participant in the Indian market. Over the past few years, more than $10 billion a year has poured into India's manufacturing industry, and a large number of Indian young people have gathered in industrial parks in Noida, Haryana and other places and began to work for employers from China. Indian factories of Chinese electronics enterprises are producing Take the electronics industry as an example. According to the data released by the cellular communications association of India, in 2014, mobile phones made in India accounted for only 3% of the world, but in the second year of "made in India" promoted by Indian Prime Minister modili, that is, in 2015, the proportion of mobile phones made in India in the world has reached 11% and exceeded that of Vietnam, It has become the second largest mobile phone manufacturer after China. At present, most Chinese brands have rapidly changed from SKD (semi loose assembly) to CKD (full loose assembly) to complete localization. According to the latest data released by Market Research Institute counterpoint research, among the top five manufacturers, Chinese smartphone manufacturers account for 63% of the Indian smartphone market. In addition, as the main builder of 5g network, Huawei is working closely with Bharti Airtel, India's second-largest telecom network operator. Bharti Airtel signed a contract with Huawei worth 3 billion rupees in early March last year, and Huawei recently won an order of 1.5 billion rupees to provide support services for the local NLD optical transmission network. But this does not mean that India's business is "easy to do". Previously, the person in charge of Xiaomi's foundry told reporters that the cost of building a local factory in India is not lower than that in China, and workers also need to invest in greater training. "At the beginning of production, the production efficiency of Indian factories was only 60% of that of China, and the production efficiency gradually increased to about 80% to 90%." The above-mentioned person in charge admitted that the technical work still depends on the hands of Chinese workers to teach Indian local workers, and they are reluctant to work overtime. They need to rest on Sunday, which is different from Chinese factories. On the tax issue, it has always been a difficult problem for Chinese manufacturers. "I often don't know when to increase taxes, and then make a surprise tax investigation." Industry insiders told reporters that since December 2017, the Indian government has increased the basic tariff on smart phones from 10% to 15%, increased to 20% in February 2018, and imposed a 10% tariff on electronic components including circuit boards and camera modules in April. Such policies are also affecting the investment rhythm of Chinese enterprises in India. "For industries with fierce competition and low profit margin, bearing tariffs meant that profits were eroded or price competitiveness was lost, so building factories (in India) became the choice of many manufacturers at that time." Yang Shucheng told reporters. Yang Shucheng believes that the "tax investigation storm" has also aroused the fear of many electronic manufacturers in the business environment in India. "The investigation of manufacturers is to treat Chinese capital differently from other foreign capital." On January 27 this year, Gao Feng, a spokesman for the Ministry of Commerce, responded that the Chinese side was concerned about the large-scale inbound tax inspection carried out by the Indian tax authorities on Chinese enterprises in India and was worried about the investment environment in India. "The investment and operation of Chinese enterprises in India has created a large number of local employment opportunities and made positive contributions to India's economic development. The summit stressed that it is hoped that India can provide a fair, transparent and non discriminatory business environment for Chinese enterprises in India." Gao Feng said. (Xinhua News Agency)