An executive from Vivo, a major Chinese smartphone manufacturer, has been arrested in India in connection with a money laundering investigation, CNN reports.
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This has raised concerns about potential increased scrutiny of Chinese businesses in India. Guangwen Kuang, who serves as the head of administration at Vivo India, was apprehended by India's Enforcement Directorate (ED), the primary financial crimes investigation agency in India. Three other individuals were also taken into custody in connection with the case.
These arrests follow allegations of money laundering and tax fraud made against Vivo by the ED in 2022. Notably, India has previously taken action against other Chinese companies. Despite these challenges, Vivo and Xiaomi, another Chinese smartphone brand, remain popular in India, with Vivo holding a 17% market share and Xiaomi at 15%.
Tensions between India and China have been elevated since a border clash in 2020, resulting in actions like the banning of Chinese apps and increased scrutiny of Chinese deals. The arrest of the Vivo executive could signal a tougher stance on Chinese companies operating in India. Chinese media, particularly the state-run tabloid Global Times, has criticized India's actions, accusing the country of "rising protectionism." China's embassy in India has also expressed concerns that these investigations could harm China's reputation among foreign investors and disrupt normal business activities.
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