A recent report published in a main Indian newspaper has claimed that Nokia has told the Indian Government that it has become a “ least favorable market.” The report further claims that Nokia has said that it would rather shift its manufacturing business to neighboring China.
A Nokia spokesman was not forthcoming in confirming the contents of the letter but he had already said on Friday that Nokia has had discussions with Government on finding ways to introduce “greater clarity to the business environment in India.The country is a priority market for us, and Chennai plays an integral part in our global manufacturing strategy.”
Nokia has had tax issues with the Indian Government and it lost an appeal in May amounting to $323.4 million regarding taxes that were imposed on it for supplying software by the Indian unit to its parent firm. Nokia claims that it was promised a refund but never got it from Tamil Nadu government.
The newspaper has reported that Nokia cited “political risk” of continuing operations in India. The letter was reportedly written in June to trade ministry of India.
Nokia makes handsets in Chennai, Tamil Nadu. The company has made an investment of about $285 million there.