India has accused South Korea's Kia of evading taxes of $155 million by misclassifying component imports but the carmaker has denied wrongdoing, the latest fight by a foreign automaker with New Delhi over tariffs,

Indian tax authorities issued a notice to Kia’s Indian unit, stating the company incorrectly declared imported parts for assembling its Carnival minivan. The notice, according to a Reuters report, alleges Kia separated shipments to reduce customs duties.

Kia competes with Hyundai and Maruti Suzuki in the world's third-largest auto market, where it has a share of 6% of roughly 4 million units a year, and its Kia Seltos and Sonet SUVs are among the top sellers.

Foreign companies have often struggled in India due to high tax demands related to duty evasion on imports or levies payable on big M&A transactions, leading to prolonged litigation at times.

South Korea's Kia has been accused by India of evading taxes amounting to $155 million through misclassification of component imports, Reuters reported on Wednesday, citing a government document and two sources.