After ED crackdown against China’s Honor, its officials flee India

Chinese smartphone brand Honor has pulled its team out of India after ED crackdown. The company will remain operational through a local team.

After India toughened its scrutiny of Chinese smartphone brands, Shenzhen-based smartphone brand Honor, formerly under Huawei, has pulled its team out of India. The company’s chief executive, Zhao Ming announced the same via a report published in the South China Morning Post.

As per the report, the company will continue to operate business in India through local partners, but the brand will adopt a “very safe approach.” Honor CEO Zhao Ming said that the company formed the India team a few years ago but chose to leave for “obvious reasons”.

The statement came after Indian authorities like the Enforcement Directorate (ED) and Directorate of Revenue Intelligence (DRI) have conducted raids and investigations of popular Chinese smartphone brands like Vivo, Oppo and Xiaomi.

Honor once used to hold a 3 percent smartphone market share in India during its peak in 2018. However, after the US sanctions, Chinese conglomerate Huawei sold off its Honor smartphone business assets to China-based Shenzhen Zhixin New Information Technology Co Ltd.

Since its launch in 2013, Honor mainly focused on the youth market by offering phones in the low- to mid-end price range. The company established itself into a smartphone brand that shipped over 70 million units annually. In India, the company entered the laptop market and expanded its wearables portfolio as well.

But now, as the Indian government tightens its probe on Chinese smartphone companies, the company has decided to pull its team out of the country. The government has raided the offices of Vivo, Oppo and Xiaomi as well as Huawei in the last few months allegedly over accusations of money laundering.

Earlier this month, the Department’s Directorate of Enforcement, raided 48 premises of Vivo Mobiles across the states of Uttar Pradesh, Bihar, Madhya Pradesh and Maharashtra. Post the raid, 119 bank accounts linked to Vivo’s India business holding 4.65 billion rupees ($58.76 million) were blocked by ED. Soon after Vivo, Oppo too came on the radar of the ED.

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