India accuses China's Huawei of tax evasion - government source

An Indian tax investigation into China's Huawei Technologies has found the telecoms equipment maker manipulated account books to reduce its taxable income in the country, an Indian government source told Reuters on Thursday.

Without naming the company, India's Ministry of Finance said a major telecoms group did not account for income of 4 billion rupees ($52 million) in its books, and showed expenses of 4.8 billion rupees that the firm failed to justify.

A Huawei spokesperson in India did not immediately respond to a request for comment.

The government allegations follow raids by its income tax authorities last month at Huawei's office premises in New Delhi, neighbouring Gurugram and tech hub Bengaluru. The residences of senior executives were raided too.

The finance ministry said more investigations were in process.

The move comes amid escalating tensions between India and China following a border clash in 2020 between the neighbouring nations. In February, India blocked access to 54 mobile apps mostly of Chinese origin, citing security concerns.

Globally, Huawei has been at the centre of a campaign by the United States, which has asked allies to exclude the company from their 5G networks over spying concerns. The company has denied it is a security risk.

In India, the government overlooked Huawei when it named foreign network equipment suppliers allowed to carry out 5G trials in what is one of the world's biggest markets by number of mobile phone users.

Huawei has also been hobbled by trade restrictions imposed by the U.S. administration on the sale of chips and other components used in its network gear and smartphones businesses.

($1 = 75.8825 Indian rupees)