By Vaughan O’Grady

The second-biggest smartphone brand in India is in the news after India’s financial crimes agency arrested Andrew Kuang, a Chinese employee of smartphone maker Vivo.

This isn’t without precedent. Authorities raided Vivo’s office last year, accusing it of illegal remittances from India to China.

In addition, Reuters recently reported that Indian police had formally accused Vivo of helping transfer funds illegally to NewsClick, a news portal that is under investigation on charges of spreading Chinese propaganda. Vivo has denied any wrongdoing.

The BBC Business website says that Tuesday’s arrest happened under the Prevention of Money Laundering Act (PMLA). Vivo has also been accused of customs evasion.

There appears to be a growing belief among Indian policymakers that some Chinese companies have not been paying enough tax. Indeed, earlier this year, India’s minister of state for electronics and IT Rajeev Chandrashekhar told parliament that Chinese companies had evaded taxes to the tune of US$1.1billion. He claimed the government had managed to recover only about 18 per cent of this amount.

According to the BBC Business website, investigations have led to major Chinese firms such as Xaomi and Oppo India being accused of financial crimes. Both firms have denied the allegations. In the past 18 months, Indian authorities have also targeted Chinese mobile phone companies such as Xiaomi by freezing US$670 million of assets.

However, these developments may have a wider context. An ongoing, and on one occasion in 2020, bloody border dispute may also have influenced Indian policy. After the 2020 skirmish, as we reported, India banned hundreds of Chinese apps, including TikTok.