Breaking news from India! Another sky-high penalty imposed on cross-border giant.

According to the latest news, an order from the Indian government shows that India has demanded Samsung and its seven executives in India to pay $601 million in back taxes and penalties to compensate for their evasion of tariffs during the import of key telecommunications equipment.

This incident not only puts Samsung and its collaborating firm PwC in the spotlight but also reflects India's tough stance on tax compliance for multinational corporations. Especially against the backdrop of intertwined "digital sovereignty" and tax gap pressures, policy risks have become a hard cost that multinational companies must face.

While India emphasizes "manufacturing tax incentives" to attract foreign investment, it later settles accounts through measures like "transfer pricing" and "retrospective GST" after companies begin operations. This "loose first, tight later" regulatory model traps companies in a vicious cycle of "investment - compliance risk - re-examination." The ambiguous standards for determining the declared value of mobile accessories in the Samsung case stem from the flexible interpretation of "transaction value" under Section 14 of India's Customs Act, granting tax authorities significant discretion.

Samsung has been ordered to pay 44.6 billion rupees ($520 million), including unpaid taxes and a 100% penalty. The order also shows that seven Samsung executives in India face an $81 million penalty. Samsung stated in a declaration: This issue involves customs' interpretation of goods classification. It added: The company complies with Indian laws. We are evaluating legal options to ensure our rights are fully protected. It urged Indian tax authorities to cancel the review, claiming the components were not subject to tariffs and that officials had long been aware of their classification practices. However, the Indian Customs Department disagreed in a confidential order issued on January 8, which has not been made public. Customs Commissioner Sonal Bajaj stated in the order that Samsung violated Indian law by deliberately submitting false documents to customs authorities for clearance.

Notably, facing Trump's tariff threats, India is actively courting the U.S. Foreign media reports indicate that India is considering cutting tariffs on $23 billion worth of U.S. imports. Additionally, India plans to abolish a controversial 6% digital tax that primarily affects U.S. tech giants like Google, Meta, and Amazon.

India's micro-level economy shows signs of fatigue: FMCG sales have stagnated, listed companies' salaries have shrunk, and the central bank has lowered its FY2025 growth forecast to 6.6%. The Samsung penalty incident has heightened multinational companies' wait-and-see attitude, potentially delaying their supply chain localization commitments and gradually eroding the real appeal of "Made in India" to global supply chains.