The Indian government has accused the Chinese smartphone maker OPPO of evading tariffs in this country.

Reuters reported that India’s Directorate of Revenue Intelligence released an investigation result on July 13. It shows that OPPO has evaded customs duty worth nearly 44 billion rupees ($550 million).

Indian investigators said they found evidence that OPPO wrongfully used duty exemptions for items it imported to produce mobile phones.

They added that OPPO’s royalty payments were not added to the transaction value of imported items as regulated by Indian law.

They have also proposed penalties on the OPPO branch in India, its employees and OPPO parent in China.

The revenue intelligence agency issued a notice to OPPO India, “demanding (the) customs duty.”

In its response, an OPPO spokesperson said the company has a different view on the charges from India.

The spokesperson added that the company is going to reply to the notice, presenting its side, and will work further with the related Indian government departments.

The investigation against OPPO was launched amid India’s growing scrutiny of Chinese smartphone makers.

It was just last week that another Chinese phone maker, Vivo, was charged with tax fraud. Vivo was alleged of transferring nearly 625 billion rupees ($7.8 billion) outside India to avoid paying taxes.

India’s Enforcement Directorate, a federal financial crime agency, raided 48 locations of Vivo and its related entities last week. It accused Vivo of transferring sale proceeds out of India to show losses and avoid paying taxes.

On July 13, an Indian court lifted a freeze on Vivo’s bank accounts imposed by the country’s anti-money laundering agency. The court ordered the company to provide $119 million in bank guarantees. Last week, Vivo was confiscated of 4.65 billion rupees ($58 million) and 2 kilograms of gold bullion assets.

China’s Xiaomi, a smartphone market leader in India, has also been under investigation. Indian authorities alleged that Xiaomi made illegal remittances abroad “in the guise of royalty” payments. 

A number of Chinese companies have found difficulties in India after political tension increased following a border clash in 2020. India has banned more than 300 Chinese apps since then, citing security concerns. It has also toughened rules on Chinese investment.

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