India turning into 'graveyard' for foreign firms

This is an editorial from China Daily.

India has been infamous in recent years for its poor business environment marked by opaque market regulations and capricious law enforcement targeting foreign, especially Chinese, businesses.

In the latest example of the extent to which the country is ready to go in disregarding international law and business norms, its crime-fighting agency on Saturday arrested two senior employees of the India unit of Chinese smartphone maker Vivo on accusations of money laundering.

Vivo has vehemently denied the charges. "We are deeply alarmed by the current action of the authorities. The recent arrests demonstrate continued harassment," a Vivo spokesperson said.

It is not the first time Vivo has faced such legal challenges in India. Just two months ago, India's Enforcement Directorate arrested four executives, including a Chinese national, from Vivo's Indian unit on similar charges.

India has made no secret of its targeting of Chinese businesses and investments following a deadly border clash in 2020. New Delhi subsequently banned TikTok and dozens of other Chinese-developed apps, on the spurious grounds they pose a threat to India's "security of state and public order".

That unwarranted move has been followed by continued onslaughts against major Chinese companies operating in India, which include a tax evasion investigation into telecommunications equipment giant Huawei and the seizure of $725 million from smartphone company Xiaomi on the grounds of illegal foreign exchange transfers, both in 2022.

It seems that New Delhi is determined to extend its border skirmishing to the business front.

Yet that would seem to be only part of its intent, for it is not only Chinese companies that have been made victims of the malevolent whims of the Indian government riding on the rise of populism. Multinationals such as Google, Amazon, Nokia and Samsung have all suffered billions of fines in India in recent years as New Delhi has doubled down on blackmailing foreign businesses with fabricated charges. No wonder India is becoming known as a "graveyard" for foreign companies.

From 2014 to 2021, nearly 2,800 foreign companies registered in India had closed their operations, accounting for about one-sixth of the total number of multinational companies in the country, according to data from the Indian government. The World Bank's Global Doing Business report has ranked India as one of the worst countries in the world to start a business.

According to the World Food Program, one-fourth of the world's undernourished population lives in India, and it is an urgent task facing New Delhi to sustain its economic growth by opening wider to foreign investments, which bring with them technology, capital and job opportunities.

Targeting foreign businesses out of political expediency will only serve to do it no good.