(Bloomberg) -- An Indian state agency released nearly 27,000 Vivo Mobile Communications Co. smartphones for export after withholding the shipment for more than a week over alleged rule violations.

The federal finance ministry’s revenue intelligence unit late on Wednesday allowed the Chinese company to collect the devices it was holding at the New Delhi Airport over an alleged mis-declaration of phone models and their value, people familiar with the matter said, asking not to be named discussing a sensitive matter. Vivo had sought to export the devices to neighboring markets.

The government agency passed the order to release the smartphones a day after Bloomberg News reported that the devices were being withheld for inspection. It wasn’t immediately clear if the revenue intelligence unit will be pressing charges against Vivo.

The shipment, worth nearly $15 million, is unlikely to be exported as the packaging of many of the phones was damaged and the devices were switched on to check unique ID numbers, the people said.

The finance ministry and Vivo didn’t respond to emailed requests for comment. 

An industry lobby group called the seizure of the phones “unilateral and preposterous,” urging India’s technology ministry to help and warning that such moves could hit India’s ambitious plans to become an export hub.

The political chasm between India and China widened after the two nuclear-armed nations clashed at a disputed Himalayan border in the summer of 2020. New Delhi has also intensified scrutiny of Chinese companies operating in India, including SAIC Motor Corp Ltd.’s MG Motor India Pvt Ltd., and the local units of Xiaomi Corp. and ZTE Corp.

The blockage of the shipments is likely to unnerve other Chinese smartphone players in India where a nationalistic government, led by Prime Minister Narendra Modi, is pushing them to ramp up exports and build local supply chains. That could threaten India’s ambitious target of exporting electronics products worth $120 billion by the end of March 2026.

Vivo exported its first batch of India-made smartphones in early November to markets such as Saudi Arabia and Thailand. But the latest snag could cloud its future in the world’s second-biggest smartphone market, where the company is already under scrutiny for alleged money laundering, a claim that has yet to be proven in court.

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