Finland wants India to quickly resolve Nokia tax issue

Amiti Sen
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Erkki Tuomioja
Erkki Tuomioja

Finland wants India to resolve its tax dispute with Finnish telecom company Nokia in a way that would allow the company’s Chennai plant to continue its operations in the future.

Finland’s Foreign Minister Erkki Tuomioja, in an interaction with Business Line, said while his Government was not party to the dispute between Indian tax authorities and the company, it was concerned about its outcome and he was in touch with his Indian counterpart on the matter.

Nokia, which sold its handset business to US giant Microsoft earlier this year, is embroiled in a Rs 2,080-crore tax dispute with Indian tax authorities who have seized its factory in Chennai.

The telecom company has appealed in the Delhi High Court for release of its factory.

Tuomioja said his country was apprehensive that if the issue was not sorted out by December 12 (the date of release of all assets as agreed upon between Nokia and MS) and Nokia is forced to keep the Chennai plant out of the deal, the plant may have to gradually close down and thousands would be rendered jobless.

Chennai plant

“I don’t know what plan the company has, but in the worst case it could lead to the closing down of Chennai plant which employs 8,000 people and sub-contracts up to 30,000 people. That would not be in anybody’s interests,” he said.

The Minister said that he had discussed the issue with the Indian Ministry of Finance and Ministry of Foreign Affairs during his recent visit to the country.

“We are concerned. We have taken up the matter on several other occasions as well. Anyone would want to see a result that would not lead to closing down of a plant that is beneficial to India and has been beneficial to Finland,” Tuomioja said.

Bad for investments

The Minister warned that if there were more disputes like Nokia’s, it will be noticed by other companies as well and will not augur well for attracting new investors.

He said the Indian market was well developed and its investment regime was developing favourably.

“You have been open. Many countries have benefited from that. But it is a two-way street. We would want to see more Indian investments in the country as well,” he said.

(The writer was in Helsinki at the invitation of the Finland Government)

(This article was published on December 3, 2013)
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