Monday, August 26, 2013: Rubbishing rumours about Nokia planning to close down its Chennai manufacturing facility, the Finnish handset maker said that the unit is an integral part of its business. According to an ET report, the company feels that the Chennai facility is an important part of its global strategy. The report also stated that the company is discussing ways to bring better clarity in the business environment across the country with the central and state governments.
Some media reports suggested that Nokia is planning to shut down its Chennai manufacturing facility as the company thinks that India is the least favourable market. The reports also claimed that the company is planning to shift to China. The company has indicated that the political risk of operating in the country may affect their future investment decisions. Nokia, which is one of the largest handset sellers in the country, is reportedly upset about the fact that it is not getting value-added-tax refunds that were promised for setting up the plant in a SEZ in Tamil Nadu.
However, Nokia has stated that it is in talks with both central and state governments, which have proved to be “both constructive and productive, and both sides have worked in a true spirit of cooperation”. Nokia clarified that the ‘cooperation between the state and the company was underlined by a recent government order’.
This complaint from Nokia comes after its dispute over the demand of Rs 20,000 million made by the income-tax department. The IT department slapped such demand over the company for not withholding tax on the payment made to its parent as royalty for the software used in its mobile phones since 2006. The tax dispute incidentally came up while Nokia was losing its market share.
