Nokia Corporation Warns To ‘Leave’ Indian Market
Written by Rich Wilde on August 23, 2013
efinancehub.com
Finnish Telecom giant Nokia Corporation (ADR) (NYSE:NOK) has told government of India that the country is currently its “least favorable market” to work in and it makes improved sense to export its products from China, as said by a report in on Friday.
Nokia, which is struggling a 20-billion rupee ($311 million) tax demand from Indian authorities, pressed the government to “act rapidly to rectify the false perception of India as a place for business”, as reported by The Indian Express newspaper. “The political risk of working in India” has unexpectedly become considerably higher and may certainly influence future decisions to expand operations in India, as said by Nokia in a letter quoted by the newspaper.
The reported threat comes at a bad time for India when the foreign direct investment has decreased to a trickle amid rising domestic economic suffers, including a dropping rupee, a massive current account deficit, slowing expansion and suspected government policy failure. The Finnish group did not instantly respond to comment on the message which The Indian Express published.
Nokia Corporation said, its tax troubles made it more cost-efficient to move the production of mobile phones to China and to import them to the Indian market rather than producing them in Chennai. Nokia, which has one of its largest plants globally in the southern city of Chennai, is among a series of multinationals in tax disputes in India together with Cadbury Royal Dutch Shell and Vodafone.
India has stepped up its search of suspected tax delinquents to decrease a large budget deficit. Nokia demands software downloaded onto its mobiles in India should to be taxed in Finland under a two-sided agreement between the countries but the tax authorities of India observe it differently. |
