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India has taken Chinese enterprises again, and vivo has become the "meat of the chopping board", can it escape the catastrophe?
After Modi's re-election, he immediately showed his true face and dealt a dead hand to Chinese companies investing in India, and the latest one suffered was the mobile phone manufacturer vivo, which was reported that vivo's company in India was sold to the Tata Group.
According to media reports, there has been a new development in the establishment of a joint venture between vivo and India's Tata Group, and if nothing else, vivo's controlling position will not be guaranteed. Previously, vivo had invested heavily in India, but now it seems that it is actually making a wedding dress for the Tata Group, the product has been produced, the market has been developed, and the sales have also gone up, but he was kicked out, how can it be reasonable?
China's economy is booming, leaving India behind internationally. In recent years, Chinese enterprises have opened up the Indian market, which is a win-win good thing, but India has seen that Chinese enterprises have made a lot of money, and they have become more and more red-eyed, not to say that Chinese enterprises have robbed the Indian market and made money that should have been made in India, so they tried all kinds of methods and excuses to restrict the development of Chinese enterprises.
The most prominent are Chinese mobile phone makers, who have had a honeymoon with India. As early as 10 years ago in 2014, Xiaomi entered India, at most, opened 7 factories in one go, and created a relatively complete industrial chain, and more importantly, Xiaomi created more than 20,000 jobs for the local area.
With its high quality and low price, Xiaomi became the No. 1 local smartphone brand in the third year of entering the Indian market, and has dominated the list for five consecutive years since then. Driven by Xiaomi, Huawei, vivo and OPPO have also deployed in India, bringing a lot of investment and employment.
As a result, I didn't expect that India would give you a little sweetness first, and then start collecting the net after more fish were hooked.
On April 27, 2022, India suddenly seized Xiaomi's bank deposits of 55.51 billion rupees, equivalent to RMB 4.8 billion, on the grounds of violating foreign exchange management laws, which not only led to Xiaomi's huge amount of money not being able to come out, but also saw a cliff-like decline in sales, in the first quarter of 2023, Xiaomi's shipments in India were only 5 million units, a drop of 40%, and the market share was overtaken by Samsung.
Xiaomi has tried to solve the problem through legal means, but what is shocking is that the High Court of India actually announced that it has no jurisdiction over the case, and no high court has jurisdiction, so where can it be sued? This move is tantamount to depriving Xiaomi of the power to take legal action.
At that time, some people naively thought that this was just an individual case, but it soon became clear that it was not an individual case, but only the beginning. Since then, Chinese mobile phone brands such as Huawei, vivo, and OPPO have also been suppressed by India. For example, in February 2023, India froze Huawei's bank account in India after accusing Huawei of remitting 7.3 billion rupees back to China for alleged tax evasion.
In July 2023, India accused vivo of remitting 62,476 crore to China and other places on almost the same grounds, and as a result, it froze nearly 400 million yuan of Vivo's deposits in India.
OPPO has not been spared, and in July 2023, India accused OPPO of allegedly evading customs duties of Rs 43.9 billion and demanded that it recover taxes.
However, India soon found that fines alone could not solve the problem, because these Chinese-funded mobile phone manufacturers were too profitable, and India felt that its own money was earned by the Chinese, which was too much of a loss.
Therefore, it came up with a crooked idea, that is, not only to keep the money earned by the Chinese in India, but also to take Chinese enterprises directly, to put it bluntly, it is a clear robbery.
To this end, India has made many unreasonable demands. For example, a Chinese company must have a joint venture with a local Indian company, and the local Indian company must have a controlling stake. For example, there must be Indians in the senior management of the company, and there must not be too few of them, and of course, it would be better if all of them were Indians. In addition, the sales channel must be found in the Indian company, so that the local company can pluck the goose.
This time, vivo lost a controlling stake in the Indian company, which was caused by this background. Vivo's painstaking business in India has been picked up by Indian companies.
In addition to mobile phones, the same is true in the automotive sector. In the first quarter of last year, MG and BYD's market share in the Indian market was only 1.4% and 0.1%, and even so, MG did not escape India's scrutiny, and BYD's application to build a joint venture factory was directly rejected by India.
There are three main reasons why India is doing this. One is that the Indian way of thinking is rather bizarre. They believe that the money you earn in India should be spent in India, and that remitting it is their loss, so they only care about short-term interests and rarely think about long-term cooperation.
For example, after the outbreak of the Russian-Ukrainian war, India bought a large amount of Russian oil at a low price, but when they settled the bill to Russia, they used Indian rupees, and Russia could not spend the rupee internationally at all. This is also the embodiment of the logic of India's thinking of making money locally and spending it locally.
The second reason is to cooperate with the United States and Western countries to curb China's industrial development. In recent years, the West has seen India as an alternative to China, showing unusual tolerance for its behavior and actively supporting Modi's economic policies.
However, India simply does not have the strength to sit on an equal footing with the West, and it considers itself an ally of the West, but in fact it has become a pawn of the West. Poor India, unaware of this.
India's "Make in India" initiative, implemented in 2014, has obvious implications for China, which is to compete with China in manufacturing. We are not afraid of fair competition, and even welcome it, but what kind of competition is this open.
Nowadays, India is becoming more and more unsuitable for Chinese enterprises to invest, and I advise those business owners to learn the lessons of Xiaomi and vivo.