Xiaomi to Oppo: Income tax raids on China, Taiwan phone makers

In a major crackdown on mobile manufacturers and distributors in India, the Income Tax department has conducted raids on the offices and manufacturing units of mobile phone-making firms from Greater China -- Xiaomi, Oppo, OnePlus, Dixon, Foxconn, and Rising Star India -- across the country on Tuesday and Wednesday. 

The raids are being conducted at more than 25 locations in Delhi, Mumbai, Chennai, Bengaluru, Kolkata, and Guwahati, among others. Offices of some fintech companies were also reportedly raided. The search was based on tip-offs regarding concealed income and tax evasion; in some places, digital data on concealed income was seized.

According to sources, state investigation wings of the income tax department were not aware of these raids. A senior income tax official said that raids are still going on in several places and the department will update once the search and seizure operations are over. Top officials of some of these companies like Xiaomi and Oppo are also reportedly being interrogated.

A Xiaomi spokesperson said: “As a responsible company, we give paramount importance to ensuring that we are compliant with all Indian laws. As an invested partner in India, we are fully cooperating with authorities to ensure they have all the required information." 

An Oppo statement read: "As an invested partner in India, we highly respect and abide by the law of the land. We will continue to fully cooperate with authorities concerned as per the procedure." 

E-mailed queries to the others remained unanswered until the time of going press. 

The raids started on Tuesday evening when I-T officials conducted a surprise raid at several offices of Redmi, Oppo, and Foxconn’s manufacturing unit at Sunguvarchatram near Sriperumbudur.

In August, similar raids were conducted at several offices of the Chinese government-controlled telecom vendor ZTE in India. Top executives of the company, including its Chief Executive Officer Li Jian Jun, were interrogated over alleged tax evasion to the tune of hundreds of crores and also reported failure to deduct tax at source (TDS) for several financial years. The telecom major was allegedly making profits on the trading of telecom equipment over the years but reporting losses on books.

The Indian smartphone market is mainly dominated by Chinese players with Xiaomi having around 23 per cent, Vivo nearly 15 per cent, Realme around 15 per cent, and Oppo having around 10 per cent market share, based on Mobile Devices Monitor data.  

According to the media reports, the Indian government had sent notices to major Chinese players like Vivo, Oppo, Xiaomi, and OnePlus, asking for details on the data and components used in their phones. In 2020, too, Chinese companies faced heat when the government banned as many as 220 Chinese applications in India, including top social media platforms with millions of Indian users.