The Tamil Nadu government has held several rounds of discussions with the company, which now needs to bring in a formal proposal.

Foxconn in advanced talks with Tamil Nadu govt to revive Nokias Chennai plantImage source: Nadkachna via Wikimedia Commons
Atom Tech Shorts Tuesday, March 06, 2018 - 12:25

Over three years after Nokia mobile manufacturing plant in Tamil Nadu was shut down, Foxconn Technology is in advanced talks with the state government to revive the plant. It is trying to resolve the Rs 21,000-crore tax dispute. If revived, the plan could potentially provide employment to thousands.

At a time when Nokia enjoyed the leadership status in the mobile phone market in India, this Chennai plant used to manufacture 100 million handsets year making it the largest such facility in the world at that juncture.

The decision of the TN government came under heavy criticism from the opposition then. The present political dispensation in the state, with the support of the government in New Delhi may be keen to revive the plant and make a political statement.

Some machinery from the plant have already been sold earlier after obtaining the necessary permissions including from the court. According to people in the know, the government of Tamil Nadu has asked Foxconn to come with a clear proposal for its consideration and the Indian arm of the Taiwanese company is in the process of submitting such a proposal in consultation with its parent company. The state government would then consult with the Centre and clear the way for the plant to be revived.

The new proposal, as and when it is presented, may seek the permission to reopen the plant and resume operations and some kind of a roadmap from its side for settling the tax dispute. The Union Finance Ministry’s revenue department has to come into play and take a stand and come to a decision.

The government at the centre is also under enormous pressure on the unemployment front and if reviving the plant can bring back jobs to those who lost it 3 years back, it could give it some cushion going into the next general elections a year ahead. From the Make in India perspective also, this could prove to be another addition to achieve some of the targets, particularly in the mobile phones sector.

Now that Nokia is back in the reckoning in the mobile phones market with its Android-run smartphones, the Finnish company might itself be interested in contracting Foxconn for manufacture of its phones at the same facility and even export the products out of India to some of the nearby markets.

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