BEIJING, January 27 (TMTPOST) — China expressed concern over the business environment in India on Thursday as local authorities conduct irregular tax probes into Chinese companies.

“China has been making investments in India, creating a lot of employment opportunities in the country and contributing positively to the local economy,” Gao Feng, spokesperson of China’s Ministry of Commerce said, clarifying China’s stance on the matter and urging India to provide a fair, transparent and non-discriminatory environment for Chinese companies.

India’s Ministry of Finance announced in the early of this month that Chinese smartphone maker Xiaomi was involved in evasion of customs duty, requiring Xiaomi to pay up US88 million taxes for evaded tax items from April 2017 to June 2020. Xiaomi has denied the Indian government’s accusation.

Xiaomi has been complying with local laws and regulations across the globe and operates legal businesses, the Chinese smartphone maker said. According to Xiaomi, the tax evasion matter raised by the Indian government has no impact on the company’s recent businesses. The tax issue came from the disagreement on the way to determine the price for imported goods, Xiaomi said.

Chinese smartphone companies are some of the main targets for India’s tax crackdowns. Xiaomi and OPPO might need to pay huge fines for tax evasion offenses in India, according to local news media Mint.

In Q3 2021, four out of the top five smartphone brands in market shares were Chinese smartphone brands. Xiaomi, vivo, realme and OPPO made it into the top five list, with Xiaomi being the most popular smartphone brand in the Indian market. Xiaomi enjoyed a 23% market share in India. Chinese smartphone brands are very popular among Indian consumers, having market shares that are far larger than that of local brands.

Crackdowns that are initiated to protect local businesses might affect Chinese businesses’ confidence in the business environment in India and their confidence in increasing investments in the country, Yang Yishuang, Associate Professor at the Research Institute for Indian Ocean Economies of Yunnan University of Finance and Economics said.

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