Commentary on Political Economy

Saturday 19 February 2022

 Indian Officials Conduct Tax Raids at Huawei Offices

NEW DELHI—Indian authorities raided the offices of Chinese tech giant Huawei Technologies Co. over suspected tax evasion, triggering a protest from Beijing, in the latest sign that border tensions between the two countries are spilling into commercial ties.

Searches are being conducted at the company’s premises in the city of Gurgaon, just outside the capital, New Delhi, and in the southern tech hub of Bangalore, an Indian tax official told The Wall Street Journal on Thursday.

“The searches are still on. We are looking at their financial books and records,” she said.

Evita Cao, Huawei’s spokeswoman, said the company is confident its operations in India “are firmly compliant to all laws and regulations.”

Ms. Cao said the company had been informed about the visit of the income-tax team, and of its meeting with some Huawei personnel.

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

Gao Feng, a spokesman for China’s commerce ministry, told a news conference in Beijing on Thursday that Indian authorities had taken measures against Chinese enterprises and products in India that he said gravely damaged the rights and interests of China businesses.

“China is seriously concerned about this,” Mr. Gao said, according to a transcript provided by the ministry.

Mr. Gao said foreign investors, including Chinese enterprises, have created many jobs in India and made positive contributions to its economic development, but are increasingly worried about its investment environment.

“It is hoped that India will improve its business environment and treat all foreign investors, including Chinese enterprises, in a fair, transparent and nondiscriminatory manner,” he said.

The tax raids on Huawei are the latest sign the Indian government is taking a tougher stance toward Chinese companies following an uptick in tensions over the two countries’ disputed Himalayan border, where a bloody clash in 2020 left troops on both sides dead.

The raids follow similar operations last year at the Indian premises of ZTE Corp., another Chinese telecommunications equipment maker, as well as Chinese-origin handset companies Oppo Mobile Tele-communications Corp. and Xiaomi Corp.

In 2020, the Indian government banned TikTok and a host of other popular short-video apps from China, saying they threatened the country’s sovereignty and integrity. This week, New Delhi banned 54 Chinese apps.

India has defended its actions against Chinese companies, citing security and privacy concerns. New Delhi also has kept Huawei out of trials for the coming 5G mobile-telecommunications network.

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