(Yicai) Jan. 2 -- India has released two senior executives of the local unit of Chinese handset giant Vivo Communication Technology, who were recently arrested by India’s anti-money laundering watchdog, according to sources.

An Indian court ordered the release of the chief executive and chief financial officer of Vivo India on Dec. 30, Yicai learned from insiders at the Dongguan-based company. Vivo has not yet released any official statement.

Last week, India’s anti-money laundering watchdog arrested a number of executives of Vivo India, including the CEO and CFO, following an investigation. The Enforcement Directorate also earlier detained the Chinese general manager of Indian consumer electronics maker Lava International and two certified accountants deemed related to the case.

Vivo entered the Indian market in 2014 and set up a plant in the north of the country the following year. The firm’s production capacity in India reached 60 million phones in 2021.

Vivo’s strategy in India is to stabilize the market without any plan to expand, a manager in Vivo’s Indian subsidiary noted recently.

China’s Vivo, Oppo Mobile Telecommunications, Xiaomi, and Realme saw their combined share of India’s smartphone market fall to 55 percent in the second quarter of last year from 61 percent in the first quarter and nearly 70 percent in the third quarter of 2021, according to data from market research firm Canalys.

Since early 2021, Chinese smartphone makers, including Huawei Technologies and Xiaomi, have been probed by Indian authorities. Some had their money in Indian accounts frozen or seized for various reasons.

At least 500 Chinese-funded businesses, including phone makers, device suppliers, infrastructure investors, and mobile app providers, have found themselves at the center of taxation and compliance investigations in India in recent years, a person familiar with the matter told Yicai.

India’s inspections of Chinese firms in the country are comprehensive and stringent, Yang Shucheng, secretary-general of the China-India-Vietnam Electronics Mobile Phone Enterprise Association, told Yicai. The authorities are also probing firms upstream and downstream in the supply chains of Chinese companies, as well as their associated firms, Yang noted.

India has consistently demanded that Chinese companies form local supply chains, especially for high-tech components, a source in the Southeast Asian consumer electronics market said, adding that Chinese firms will become increasingly cautious, while other foreign businesses will develop their supply chains in India more slowly than expected.

Editors: Shi Yi, Futura Costaglione