“They may be losing interest in India.”
On August 12, India’s “Business Standard” came to this conclusion.
According to Indian Commerce and Industry Minister Goyal, a total of 2,783 multinational companies closed their subsidiaries or offices in India from 2014 to 2021. Considering that there are only about 12,000 “active” foreign companies still operating in India, this number is not small.
And what is the reason that causes multinational companies to withdraw from Asia’s third largest economy?
Resolutely seize the wool of foreign companies, India is too “tough”
At one time, Chinese entrepreneurs and capital were ambitious and thought they could get involved in the Indian market, which has a huge population base and growth potential.
But it turns out that the huge Indian market seems unable to accommodate Chinese mobile phones.
In 2014, Vivo, who stepped into the experimental field of India shouting “Love India, Love vivo”, probably would not have imagined that what awaited him would be an eight-year campaign against Chinese technology companies.
However, in the eighth year, India has launched a new round of more precise sniper plans against the Chinese smartphone camp.
On January 1, 2022, the Indian Ministry of Finance required Xiaomi India to pay back taxes of approximately 560 million yuan;
On May 1, 2022, nearly 5 billion yuan in Xiaomi Group’s bank accounts were frozen;
On July 7, 2022, 119 vivo bank accounts in India were blocked and nearly 400 million yuan was frozen;
On July 14, 2022, India allowed Vivo to unfreeze its bank account, and then directed its fire at OPPO, claiming that it had evaded nearly 3.8 billion yuan in taxes;
On August 3, 2022, vivo was targeted again, accusing it of tax evasion of nearly 1.89 billion yuan…
On the grounds of tax evasion, the drama of surprise attacks by Indian and Chinese smartphone manufacturers can last for almost 800 episodes.
With this operation, it is no wonder that Honor directly announced its withdrawal from the Indian market and “no longer serves.”
However, Chinese companies are not the only multinational companies that have been hit by India’s tax “big stick”. When it comes to “picking up foreign companies’ wool”, India treats everyone equally. British telecommunications giant Vodafone, American IBM, French spirits manufacturer Pernod Ricard, and many other companies, including Samsung, have all been “debt claimed” by India.
Some netizens commented that India’s strategy is to attract foreign-funded companies first, and then harvest the wool after it has developed to a certain level, leaving these companies with nothing to lose.
You know, it was India that was attracting investment at that time, and it was India that wanted to use foreign capital to develop its own economy. But when foreign capital entered the Indian market, he “changed his face” and raised tax rates. They are either looking for excuses to seize the finances of foreign companies, or they are constantly raiding the operations of foreign companies under the pretext of tax inspections.
Such an operation will not only cause foreign capital to flee, but will also seriously affect credibility. Focusing only on immediate interests without caring about long-term interests is tantamount to fishing from the lake.
No wonder, more than 2,000 multinational companies have suspended their operations in India.
The “Made in India” plan is embarrassing, and Modi’s dream of becoming a powerful nation is even further ahead
It is worth noting that in his Independence Day speech on August 15, Indian Prime Minister Modi just stated that India’s goal is to become a developed country within 25 years.
Modi wants to achieve overtaking in a corner through the development of domestic energy, defense and electronic technology, and he has to mention the “Make in India” plan.
In fact, India has always hoped to become the new “world factory” and launched the “Made in India” plan with high profile in 2014. To achieve this goal, New Delhi has been trying in recent years to attract multinational companies to shift their production bases from China to India.
The United States has also always hoped that India would rise to contain China. However, the reality has disappointed the United States and other Western countries.
“Capitol Hill” believes that the West’s hope for India to become a modern and prosperous country has not been realized at the speed predicted by some people in the first few years of the 21st century. India is not yet strong enough to become China’s “strong rival”.
India’s series of “petty gains” that destroy the market environment are undoubtedly shooting itself in the foot.
Nowadays, more than 2,000 multinational companies have staged “escape stories”, which not only puts the “Made in India” plan into an embarrassing situation, but also makes Modi’s dream of a strong country further away.