Vivo is sticking with its India plans despite investigation

vivo india
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Chinese smartphone maker Vivo said that it “remains committed” to the Indian market despite the ongoing investigation by local authorities over alleged tax evasion and money laundering.

Paigham Danish, head of Business Strategy at Vivo India was quoted as saying by the Economic Times that the handset maker has not revised its timelines for increasing the production capacity of its manufacturing unit and expanding exports within this year.

Investigations and legal battles

Earlier this year, India’s Enforcement Directorate alleged that the Chinese smartphone company remitted $7.6 billion – almost half of its turnover – out of India, mainly to China. The ED suspects Vivo of doing this to show huge losses in its Indian incorporated companies, thus enabling it to avoid paying taxes in the country. The country’s Directorate of Revenue Intelligence (DRI) also accused Vivo of tax evasion after the ED began its investigation.

Danish didn’t directly comment on the charges levelled by the ED and the DRI in the report.

Indian authorities have also opened up investigations against Chinese firms Xiaomi, Oppo, Huawei and ZTE.

Xiaomi is currently fighting a legal battle in India after the ED seized $725 million from the company’s India bank accounts in April, alleging it had made illegal remittances abroad “in the guise of royalty payments.” An Indian court temporarily lifted the block following a challenge by the company. The case is ongoing.

Vivo plans

Vivo is the third largest smartphone maker in India, accounting for a 15% market share, according to Counterpoint Research. China’s Xiaomi has the biggest share (24%), while South Korea’s Samsung Electronics has 18%.

Vivo had previously said that it will make a total investment of $914 million in India. Up to 2021, It had already invested $231 million towards establishing and expanding its manufacturing units. Vivo intends to invest $195 million more by 2023 to double its annual local production capacity and develop India as a global hub for exports.

With the investment, the company plans to double its annual production capacity from 120 million in future.

Danish said that Vivo will start smartphone exports from its India factory, situated in Uttar Pradesh state, by the end of 2022.

He also revealed that the handset company is taking steps towards establishing local and global R&D for its handsets, having already established its industrial design center in the country.

“The industrial design center localises the colour, the looks of the smartphone. This is one step towards that,” Danish added.

Vivo is currently working with Indian telecom operators Reliance Jio and Bharti Airtel to enable support for their 5G networks. Danish said that Vivo is ensuring that all of its 5G handsets launched from 2020 support both standalone and non-standalone 5G networks.

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