You fined me the money, I laid off your staff, and the Lei army directly attacked India seven inches, making it pay the price for greed

Tech 2023-07-22 02:46:44 Source: Network

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Wen | Qian Bufan

Editor | Qian Bufan

preface

What? India claims that Xiaomi India's subsidiary has frozen all the money Xiaomi India has placed in the bank, citing illegal transfer of funds to foreign entities in violation of their foreign exchange management laws.

This amount of money is not a small amount, totaling 55.51 billion rupees, which is equivalent to 4.8 billion yuan in our country's RMB, almost equivalent to more than half of Xiaomi's net profit in 2022.

The operation in India is truly puzzling. I don't know why he suddenly challenged Xiaomi, causing the situation that should have been mutually beneficial to break down.

In the face of this wave of chaos in India, Lei Jun is not a fool either. He cannot see that India is trying to trap his money, and since he has been bullied, he must make a counterattack. As the saying goes, if you are unkind, don't blame me for my injustice.

How did Lei Jun respond to the Indian riot operation?

This is not the first time India has challenged Xiaomi

In fact, this is not the first time India has taken measures against Xiaomi's Indian subsidiary. As early as 2014, when Xiaomi first entered the Indian market, India took measures against Xiaomi's Indian subsidiary.

As the domestic market became increasingly saturated, Xiaomi decided to expand into overseas markets to meet its demand. India, which had a population comparable to China, became Xiaomi's preferred target.

In 2014, Xiaomi officially entered the Indian market, but in India, which has the world's second largest smartphone market, even a large company like Xiaomi was very difficult to develop in the early stages,

In order to quickly open up the Indian market, Xiaomi India subsidiary adopts a unique sales strategy and cooperates with multiple well-known local companies to achieve win-win cooperation.

Xiaomi's decision not only saved them a large amount of cost expenses, but also attracted a large wave of customers with highly competitive value and advanced technology.

In order to save transportation costs and solve the problem of difficult employment for local people in India, Xiaomi has built several factories in India, greatly solving the problem of difficult employment for Indian residents.

At the same time, Xiaomi will also use some of the money earned in Education in India to donate and support in Indian education, environmental protection, disaster relief and other fields.

It can be said that Xiaomi is not simply earning their money in India, but rather seeking a mutually beneficial situation and achieving mutual success.

However, I don't know what India thinks, it seems like there is paranoia of persecution. When Xiaomi first entered India, they made modifications to the amount of foreign investment they received from them.

It's hard not to associate this with India targeting Xiaomi and other Chinese companies.

In 2020, India announced a ban on 59 software developed by Chinese companies, most of which were independently developed by Xiaomi.

In addition, they also require Chinese companies like Xiaomi to choose key positions such as CEO or CFO when establishing branches in India, which must be held by India.

In 2021, India claimed that Xiaomi's Indian subsidiary was suspected of tax evasion from 2017 to June 2020, and issued a skyrocketing fine of 6.53 billion rupees (approximately 558 million RMB) to Xiaomi's Indian subsidiary.

However, this is not over yet. India has also frozen 55.51 billion rupees (approximately 4.8 billion yuan) placed in banks by Xiaomi's Indian subsidiary.

The reason given by India to the outside world is that Xiaomi's Indian subsidiary has illegally remitted money to overseas entity companies under the guise of counterfeit payment of patent fees since 2015, in violation of their relevant provisions under the Foreign Exchange Management Law of 1999.

Faced with the unfounded charges imposed by India on Xiaomi's Indian subsidiary, they will certainly not let India talk nonsense about it.

In response, Xiaomi India's subsidiary quickly clarified that the copyright fees and bills they paid to the bank were genuine and valid, and their copyright fees were all used to pay for the relevant payment technology and intellectual property fees used in products produced in India.

However, no matter what Xiaomi's Indian subsidiary says, the Indian side turns a deaf ear to this, with an attitude that I am going to punish you. What can you do with me.

In fact, this is not the first time that India has done this to foreign companies. Some companies in the United States have also been fined heavily in India.

For example, in the Vodafone case of that year, India changed its national laws and directly fought with him for 13 years in order to pit him.

Sad Vodafone

In 2007, Vodafone in the UK took a fancy to the huge market in India and wanted to buy a local communication company in India, but they did not want to pay transfer tax to India.

So Vodafone acquired a company registered in the Cayman Islands. As you should know, the Cayman Islands is a tax haven for the rich, and this company is the parent company of India Essar Communications.

According to the idea of Vodafone's senior management, they will purchase the parent company, and then his subsidiaries will be transferred to their own names, so they will not have to pay taxes to India.

Because according to the tax laws of India at that time, the transfer of equity in Indian companies was subject to tax in India

However, Vodafone's operation is not to acquire Indian companies, so it does not have to pay taxes.

However, how could the Indian side allow them to take advantage of themselves? Moreover, the current India is not the India of 100 years ago, so they began to use chopsticks to poke their buttocks and forcefully argue.

The Indian side believes that since their local companies are involved, they must comply with their laws and pay them $2 billion in taxes.

But how could Vodafone pay it? Otherwise, it would be useless. However, no matter how you choose, India will freeze your deposit if you don't pay it.

However, Vodafone had to file a complaint against the Indian tax bureau in court, and Vodafone's move made the Indian tax bureau laugh. It sued the Indian tax bureau on the Indian territory. Isn't it inserting a straw in the pit - sucking shit?

As a result, there is no doubt that the local court simply did not accept their above, but Vodafone did not give up and directly took the matter to the Supreme Court of India.

This time, the Indian court could not refuse to accept his above statement, and could only hear the case. However, their income tax law at that time did not have relevant legal support, and Vodafone won the lawsuit.

However, how can India let a duck fly away when it comes to its beak?

Isn't there no relevant law in their legal system at that time? The Indian directly added the regulation that "indirect transfer of equity in Indian companies also requires taxation to India" and extended the prosecution period to 50 years.

Vodafone then vomited what they had recovered. At the same time, according to Indian law, Vodafone also had to pay them a fine of $5 billion.

This enraged Vodafone executives. They wanted to pay less personal tax, but now they have not paid less, and they have to pay so much compensation.

So Vodafone executives took India to the International Court of Justice, and the 13 year lawsuit began. Although Vodafone won in the end, they never dared to invest in India again.

With foreign companies facing repeated repression in India, it has become known as the "graveyard of foreign companies".

Lei Jun's Counterattack

Faced with the continuous suppression of Xiaomi by the Indian side, Lei Jun finally couldn't bear it and decided to launch a counterattack because he had stated in a speech that he would make adjustments to Xiaomi's Indian subsidiary.

The adjustment mentioned by Lei Jun is to lay off a portion of Indian employees, causing the proportion of Indians in the company to plummet.

According to relevant data, Xiaomi's Indian subsidiary has laid off hundreds of employees, and such layoffs may continue.

Some people may think that just laying off employees is not a counterattack, as it is like scratching the itch for India, and it is impossible to make it feel pain.

Actually, if you have some understanding of India's current situation, you should know that India has now surpassed China in terms of population, becoming the world's most populous country.

Although their population has increased, their economic development is not good, which has caused a serious imbalance between their job positions and population ratio, which can be said to be more monks than meat.

And the reason why major foreign companies want to invest here is to see the cheap labor here.

But due to India's lack of friendliness towards foreign companies, they treat them as fat sheep waiting to be slaughtered, constantly punishing them with money, which leads to foreign companies not daring to invest here.

Without foreign companies entering, it is obviously impossible for India to rely on its own domestic enterprises to solve local employment problems.

Originally, Xiaomi entered India and, in line with India's policies, opened factories here to provide employment opportunities for those who still have jobs in India.

At the same time, taking out a portion of the money earned in India and providing them with assistance in fields such as education, healthcare, disaster relief, etc., to break the mutually beneficial situation that should have been mutually beneficial, then naturally blame us.

And these Indians who have been laid off by Xiaomi's Indian subsidiary will face difficulties and even become homeless due to their inability to pay for their family expenses after losing their jobs.

And the practice of Xiaomi's Indian subsidiary will also attract some foreign companies suppressed by India to follow suit.

Once this situation occurs, the losses caused to the Indian side will be significant, but all of this is caused by the Indian side alone.

Moreover, this is still a measure taken by Chinese enterprises towards India, and the national side has not taken any action yet. If the Indian side does not provide us with an explanation for the freezing of funds for Chinese enterprises.

In order to safeguard the rights and interests of Chinese enterprises, our country will also take corresponding measures.

epilogue

I hope that India can learn from the lessons learned, establish a stable and fair business environment, treat foreign enterprises well, cooperate with them for mutual benefit, and jointly develop the local economy.

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END

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