Smartphone Manufacturing
Smartphone Manufacturing

Indian Smartphone Firms Exercise Caution In Engaging Chinese Nationals, Says Report

Indian smartphone manufacturers exercise caution involving Chinese nationals following recent executive arrests in both Indian and Chinese companies

Indian smartphone manufacturers are becoming more vigilant about involving Chinese nationals in installation, expansion, and repair tasks. This comes in the wake of recent arrests of executives from both Chinese and Indian smartphone companies.

Amidst ongoing geopolitical tensions between the two nations, Chinese executives have become hesitant to visit India due to the recent arrests. As per a report by the Economic Times, these tensions are hindering the expansion of local production in India, which aspires to establish itself as a global hub for smartphone manufacturing.

There are concerns in the domestic segment regarding visa misuse by Chinese nationals. Indian smartphone brands are cautiously issuing visa invitation letters only for technical support, with valid proof statements

The government implemented a visa system specifically for Chinese nationals along with a new mandate necessitating government approval for investments in India by companies from neighboring nations.

Hari Om Rai, the managing director of Lava, was arrested by the Enforcement Directorate (ED) in October last year, in connection with a money laundering case involving Chinese smartphone maker Vivo. The ED claims that Rai facilitated Vivo's establishment in India at the behest of Vivo China, which involved securing funds without collateral, providing office space, and issuing visa invitation letters. Rai eventually got on an interim bail citing health reasons.

In December, the ED also detained Hong Xuquan, the interim chief executive of Vivo India, along with CFO Harinder Dahiya and consultant Hemant Munjal. All three of them were also granted bail by a trial court.

The government's increased scrutiny of Chinese companies has led to a trust deficit among Chinese component makers crucial for advancing localization and value addition in India's electronics manufacturing sector, according to sources cited in the report.

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