Nokia says India Is A least Favorable Market
The telecom giant
Nokia has told India's government that the country is now its "least
favorable market" to operate in and it makes better sense to export its
products from China, a report said Friday. Nokia, which is fighting a
20-billion rupee ($311 million) tax demand from Indian authorities, urged the
government to "act quickly to correct the wrong perception of India as a
place for business", The Indian Express newspaper reported. "The
political risk of operating in India" has become "suddenly
substantially higher and may inevitably influence future decisions to develop
one's operations in India", Nokia said in a letter quoted by the daily. The
reported warning comes at a bad time for India when foreign direct investment
has slowed to a trickle amid mounting domestic economic woes including a
plunging rupee, a huge current account deficit, slowing growth and perceived
government policy paralysis.
The Finnish group did
not immediately respond to requests for comment on the message which The Indian
Express said was dated June 19 and was received by the finance ministry last
month. Nokia said its tax problems made it "more cost-efficient for Nokia
to transfer the manufacture of mobile phones to China and to import them to the
Indian market rather than manufacture them in Chennai". Nokia, which has
one of its biggest plants world-wide in the southern city of Chennai, is among
a string of multinationals in tax disputes in India including Cadbury Royal
Dutch Shell and Vodafone. India has stepped up its pursuit of alleged tax
delinquents to reduce a hefty budget deficit. Nokia insists software downloaded
onto its mobiles in India should to be taxed in Finland under a bilateral
treaty between the countries, but India's tax authorities view it differently. "Nokia
does not think India can override its international obligations," Nokia
was quoted as saying. Tax claims against Nokia and other multinationals have
"too great an impact on the predictability and certainty of Indian
business environment to be ignored", Nokia added. India one of the world's
fastest-growing mobile phone markets is the second largest market for Nokia
which began operations in the country in 1995 and employs 8,000 workers
directly in Chennai. Nokia which had been the country's leading handset maker
for 14 years recently ceded its crown to South Korea's Samsung.
Subscribe to:
Post Comments
(
Atom
)
No comments :
Post a Comment