NEW DELHI: Finnish telecom giant
Nokia has told India's
government that the country is
now its "least favourable 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.source Nokia threatens to ‘quit’ India: Report - TOI Mobile | The Times of India Mobile Site
Nokia has told India's
government that the country is
now its "least favourable 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.source Nokia threatens to ‘quit’ India: Report - TOI Mobile | The Times of India Mobile Site
