Former Huawei smartphone sub-brand Honor said to withdraw team from India amid geopolitical tensions

Former Huawei smartphone sub-brand Honor said to withdraw team from India amid geopolitical tensions

Chinese smartphone brand Honor, formerly under Huawei Technologies Co, has pulled its team out of India, chief executive Zhao Ming said, as New Delhi continues to tighten its scrutiny of Chinese companies.

Honor formed the team a few years ago, but chose to leave for “obvious reasons”, Zhao was quoted as saying during the company’s smartphone launch event on Thursday, in a report by state-run newspaper Securities Times.

The Shenzhen-based company’s Indian business will remain in operation, managed by local partners, Zhao reportedly said, but the brand will adopt a “very safe approach”.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Honor did not immediately respond to a request for further information on Sunday.

Zhao Ming, CEO of Honor, reportedly said the company plans to withdraw its team from India. Photo: Handout alt=Zhao Ming, CEO of Honor, reportedly said the company plans to withdraw its team from India. Photo: Handout>

This comes as several top Chinese smartphone brands have come under investigation by Indian authorities.

Earlier this month, India’s financial crime-fighting agency raided Vivo’s local offices and froze the company’s bank accounts on suspicion of money laundering. Days later, the Indian finance ministry searched the office premises of Vivo’s sister brand Oppo, accusing it of evading US$550 million in customs duty.

In May, the Indian government seized US$725 million from Xiaomi over alleged illegal remittances, after officials in January ordered the company to pay roughly US$87.8 million in past-due import taxes.

In February, Indian tax officials conducted searches at the offices of Huawei.

Tensions have been running high between India and China following a deadly military clash in 2020 over the countries’ disputed Himalayan border. Since then, India has banned more than 250 Chinese apps, citing security concerns.

New Delhi’s latest regulatory storm triggered new criticism from Beijing, which said the frequent investigations of Chinese smartphone companies had disrupted normal business activities and would “impede the improvement of the business environment in India”.

Despite the dispute with China, India – home to at least 800 million internet users and projected to overtake China as the world’s most populous country next year – is still a major international market for Chinese handset makers.

Xiaomi remained the top-selling smartphone brand in India during the second quarter with 7 million units shipped, while Vivo, Oppo and Chinese brand Realme all ranked among the top five, according to a report by research firm Canalys on Wednesday. Collectively, Chinese players shipped 76 per cent of all smartphones in the market.

Honor, which once held a 3 per cent market share in India during its peak in 2018, had fallen out of the top five after the US government imposed crippling sanctions against Huawei.

To help Honor bypass Washington’s trade restrictions, Huawei in 2020 sold the budget brand to a consortium led by the Shenzhen government. Last October, Honor resumed partnership with Google and launched a handset equipped with Google apps outside China.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.