Although the Chinese mobile phone company that was confiscated by India with 5 billion yuan previously stated that it would continue to invest in India, Indian media reports recently pointed out that the company has reduced the 1,500 employees of the Indian company by 500 and is still reducing, showing that In fact, this mobile phone company quietly fled India. In fact, this is not an isolated case, but it has always been the case in India.
1. The Vodafone case became an international laughing stock in India
Vodafone acquired Li Ka-shing’s telecommunications company in India in 2007, and then India imposed a fine of US$2 billion on Vodafone. Vodafone refused to accept it and filed a lawsuit in the Indian court. India ruled against Vodafone in the first instance, and Vodafone filed a lawsuit in the Indian High Court. The High Court of India ruled against the Indian tax department on the grounds that there was no legal basis.
The Indian tax department said that there is no legal basis, so the Indian Congress quickly amended the relevant content of the "Income Tax Act", allowing the Indian tax department to trace back the relevant provisions within 50 years. A $5 billion fine was issued.
Vodafone blew up and filed a lawsuit with the International Court of Arbitration; but it was the Indian taxation department that died. The Indian taxation department got the latest "Income Tax Law" clauses, so they imposed fines on foreign-funded enterprises in India, including only those in Europe and the United States. The fines of 17 companies amounted to more than 10 billion U.S. dollars, which triggered a rebound in Europe and the United States. Finally, under the pressure of European and American countries, the fines were given up, and Vodafone was also exempted from fines, while India became an international joke.
2. India has repeatedly adopted measures for foreign-funded enterprises
After Vodafone, the most famous one is Nokia. Nokia became the largest mobile phone company in the world for 14 years. Of course, it also entered the Indian market. India has not yet exerted pressure on taxation and other aspects as it is now, and Nokia took the initiative to embrace the Indian market.
However, the consequences of Nokia were not good. After Nokia became bigger in India, the Indian tax department thought that Nokia had become fat and began to attack Nokia. They also imposed huge fines on Nokia on the grounds of tax issues. factory, withdrew from the Indian market.
Later, there were companies such as Ford and Wistron. Ford has opened a factory in India for many years, but it has been losing money, so it plans to close the factory in India. The factory with a final production capacity of more than 100,000 only bought the Indian consortium Tata for more than 90 million US dollars, but India is not willing to let Ford After retreating, India finally forced Ford to pay a price of US$1.8 billion on the grounds that it needed to reasonably arrange the employment of Ford's employees in India.
Wistron is a matter of this year. Wistron entered the Indian market in 2020 and only had 10,000 employees in India after more than two years of development. Compared with Wistron’s early factory in mainland China, which had 80,000 employees, the Indian factory However, the Indian consortium did not let it go. In April this year, Wistron was forced to sell the factory to Tata. In a rage, Wistron announced that it would close all Indian businesses and completely withdraw from the Indian market.
3. India’s move will lead to disruption in manufacturing
India's manufacturing strategy was proposed by the current Indian Prime Minister Narendra Modi. Modi served as the Prime Minister of India in 2014. Modi then proposed a strategy for the development of Indian manufacturing. However, the progress of the Indian manufacturing strategy has been slow in the following years.
Foxconn should be one of the first companies to plan to invest in India. Foxconn once proposed a plan to invest US$5 billion in India. As a result, Xiaomi mobile phones dominated the Indian mobile phone market in 2017. Since then, Xiaomi has been the largest mobile phone company in India until 2022. In 2019, Foxconn opened a large factory in India to manufacture iPhones for Apple.
A few years have passed, and India has once again repeated fattening pigs and killing them. This time, they have repeatedly attacked Chinese mobile phone companies. However, although Chinese mobile phone companies have stated that they will continue to invest in the Indian market, it can be seen from the large-scale reduction of employees. Withdrawing from the Indian market; not only Chinese mobile phone companies are retreating, but even Foxconn has slowed down its expansion plan in India due to the influence of Wistron.
At the same time, Apple, which has been advocating the promotion of manufacturing in India before, has also lowered its voice. Recently, Apple is preparing to put into production the latest iPhone 15. Although Apple has not said anything, it can be seen from Foxconn’s high bonus of 8,000 yuan in mainland China again. The mass production of iPhone 15 has to be made in China again. Obviously, after Wistron was hit, Apple finally realized that it is more reliable to make in China.
The quiet retreat of these companies from India is likely to become a trend, leading to the interruption of the strategy of making in India. After all, no company wants to enter a market that is always risky; in contrast, Foxconn and Wistron have developed in mainland China for 20 years. For many years, their scale in mainland China is much larger than that of the Indian market, but they have always had the leading power in factories in mainland China, which reflects the opening of China's economic environment and may attract foreign companies to increase their investment in China. Investment intensity.