India Study Group

http://www.dnaindia.com/report.asp?newsid=1185748&pageid=2

NEW DELHI: Chinese telecom firm Huawei is in trouble once again.

The latest salvo has come from the ministry of labour and employment, which has sent a notice to the company saying it has employed a large number of Chinese workers in India without proper work permits.

The labour ministry has added that these workers “are also not paying the applicable income tax for which they do not have immunity.” According to the government, this is a complete violation of the law of the land and a fraudulent act.

A source, who is familiar with the situation, pointed out that there could be as many as 400 to 500 Chinese workers in India working for Huawei. Of these, very few have valid work permits. The remaining have short-term business visas, the source added.
Even then, most of them manage to continue working in India for two to three years.
According to him, this is the situation in many Chinese companies operating in India, not just in Huawei.

The source argued that it would be wrong to say that the Indian government is not aware of the situation. “The government has been lenient about investigating the misuse ,” he said.

In recent years, Huawei has also been under the government scanner when the Chinese firm wanted to set up a manufacturing base in India.

The companies application was not cleared as some sections within the government feared security threat linked to Chinese investment.

Subsequently, Huawei withdrew its proposal for a manufacturing plant after the Foreign Investment Promotion Board (FIPB) kept the application pending for long.  This is despite Prime Minister Manmohan Singh indicating that Chinese investments in India would be given a priority.

This time, however , the Indian government, while raising the concern of  fraudulently employing Chinese workers in the country, has said that the top management of the company including the CEO would be reprimanded by financial penalties orand imprisonment.

It has also asked the company to repatriate such workers immediately. The government could even ask Huawei to close its business premises in India.

According to agency reports, the Huawei spokesperson said that the company had received the notice. But, he said, that Huawei strictly complies with Indian tax regulations.

According to the government, the employees are staying in India on business visas and residing illegally in apartments without valid resident permits for prolonged periods, abusing visa rules and convention.