July 17, 2024

India should stop its “regulatory assault” on Chinese companies, state-backed Chinese newspaper Global Times said, after smartphone maker Xiaomi alleged threats of “physical violence” in Indian investigations.

Reuters reported on Saturday that Xiaomi had told a court that its top executives faced threats and coercion during questioning by the Enforcement Directorate investigating illegal remittances. The agency, the Enforcement Directorate, called the allegations “untrue and baseless”.

Citing the story, the Global Times in an opinion piece late on Sunday said the uncertainty surrounding Xiaomi’s “regulatory predicament should raise a red flag for India” and asked New Delhi to stop its “regulatory assault on Chinese companies”.

“The impression that Chinese and other foreign companies could be intentionally targeted and suppressed isn’t something good or favourable for India,” it said.

“It is of great importance for India to maintain normal and effective communication and coordination with Chinese investors.”

Many Chinese companies have struggled to do business in India due to tensions following a border clash in 2020. India has cited security concerns in banning more than 300 Chinese apps since then — including TikTok — and tightened norms for Chinese companies investing in the country.

Global Times is a nationalistic tabloid published by the Communist Party’s People’s Daily. Its views do not necessarily reflect the official thinking of policymakers.

The Enforcement Directorate and a government spokesperson did not immediately respond to a request for comment on the Global Times’ view. Xiaomi, the biggest smartphone seller in India with a 24 percent market share and 1,500 employees, also did not respond.

The ED on April 29 seized $725 million (roughly Rs. 5,600 crore) in Xiaomi’s India bank accounts, saying it made illegal remittances abroad “in the guise of royalty” payments.

A court last week put on hold the agency’s decision, and the case will next be heard on May 12. Xiaomi denies any wrongdoing and says all royalty payments are legitimate.

“It is fair to say that Xiaomi hasn’t been able to communicate effectively with Indian regulators,” Global Times said. “What has happened to Xiaomi could be seen as another example of India’s crackdown on Chinese companies.”