Wants to get in new investors fast to prevent revenue and job loss due to its closure
Showing the urgency of reviving the Finnish mobile device manufacturer Nokia's plant at Sri Perumbudur in Chennai, the government has sought the view of Department of Industrial Policy and Promotion (DIPP) on the way forward.
Ajay Kumar, joint secretary of Ministry of Communication & IT, told dna the government was considering all options to get the mobile phone facility, which was shut down in November last year, operational again.
"There exists an eco-system for handset manufacturing (in Chennai). The plant has been closed down due to tax disputes. If the promoters (Nokia) cannot operate it then some other investor can be brought in. We are in discussion with all stakeholders and are getting the views of DIPP on the subject," said Kumar.
The Finnish telecom major was forced to shut down its plant in Chennai last year due to its ongoing tax tussle with the state and central government on retrospective taxation and asset freeze.
An internal note of the telecom ministry suggests that deadlock could be ended by "lifting the asset freeze on the Nokia plant by way of an acceptable settlement that could be ratified by the court".
It advises that freeing up asset would allow Nokia to look at other long-term solution for the factory.
"It would also benefit the broader SEZ (in Chennai), and limit damage to its reputation as a good destination for investment. It may also inject new life in the facility," says the internal note.
This move will propel Prime Minister Narendra Modi's 'Make In India' initiative, as the MNC telecom firm's plant at SEZ in Chennai is the largest mobile manufacturing facility in the world. Besides this, its closure was also causing a loss of revenue to the government besides loss of job to thousands of workers who were employed at the factory.
There have been reports that the Noida-based mobile phone company Lava could buy out the plant from the Finnish telecom firm. This has, however, not been confirmed by anyone.
A corporate communication executive said as of now, Lava did not have a "concrete deal" to buy out Nokia's Chennai plant.
"Independently, we are focusing on the northern region, where currently the imported handsets from China are being repaired," he said.
Nokia officials were not available for comment. The company is embroiled in a tax dispute with the Tamil Nadu government, which has slapped a Rs 2,400 crore notice on it for evading tax on mobile handsets sold in the domestic market. Simultaneously, it is involved in a legal tangle, where the apex court has ordered it to produce a Rs 3,500 crore guarantee before transferring its plant to Microsoft, which recently bought over Nokia's handset division.
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