I-T Dept Searches Huawei India Offices in Delhi, Gurgaon and Bangalore

[ABS News Service/16.02.2022]

The Income-tax department is conducting searches at multiple premises of Chinese telecom company Huawei offices in Delhi, Gurgaon and Bangalore. The operation, which is ongoing since Tuesday, comes months after a similar action against its Chinese counterpart ZTE

Officials are looking at the company’s financial documents, account books, and overseas transactions under a tax evasion investigation. People familiar with the matter said that officials have seized some records as part of the investigation after questioning Huawei India’s senior management.

The development comes days after Huawei lost a key executive to Apple India. Ramu Patchala, executive director at Huawei India left the company last week after serving the company for over 21 years. He was the first employee at Huawei’s India operations.

“We have been informed of the visit of the Income Tax team to our office and also of their meeting with some personnel. Huawei is confident our operations in India are firmly compliant to all laws and regulations. We will approach related government departments for more information and fully cooperate,” a Huawei India spokesperson said in a statement.

Notably, Huawei recently bagged a telecom infrastructure expansion contract worth Rs 150 crore from India's second largest telecom operator, Bharti Airtel. The deal given to Huawei was part of an ongoing Airtel process to upgrade and expand its National Long Distance (NLD) network which is currently run by the Chinese vendor. Airtel had last year awarded a similar contract to Huawei worth Rs 300 crore.

The Chinese company is facing huge uncertainty over its continued involvement in the Indian telecom market, especially its participation in the upcoming 5G network deployments in the country, due to allegations of its involvement in cyber-snooping on behalf of the Chinese state. Huawei has denied any wrongdoing.

The pressure on Huawei has increased over the last year or so amidst escalating Sino-Indian border tensions and question marks over its supply chain given US sanctions. In this backdrop, Huawei has been losing meaningful wireless business from even Bharti Airtel over the last 15-18 months with India’s second largest telco replacing it with European vendors in two circles.

The Income-Tax Department had in August 2021 conducted similar searches on Chinese telecom gear maker ZTE Corp and unearthed tax liability worth hundreds of crores, unaccounted cash and a failure by the company to file TDS for several financial years.

Chinese mobile handset makers Oppo and Xiaomi too have been under the lens of tax authorities. It is also looking at concealment of income and other doubtful financial transactions conducted by the gamut of Chinese companies operating in the telecom and electronics space.

On Monday, the information technology ministry had also initiated fresh action against 54 Chinese apps accusing some of them of posing a threat to the country, taking the number of companies that have faced action to over 300 now.