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Nokia Warns 30,000 Jobs at Risk at Indian Factory

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Nokia has appealed to India's Supreme Court for relief after a lower court imposed new conditions on its plans to sell its Indian handset factory to Microsoft.

The Delhi High Court had previously said that Nokia could include the Chennai factory to Microsoft as part of the handset division sale, but late last week added new conditions to the sale.

The conditions have been applied as the factory assets had been frozen as part of a tax dispute that Nokia is engaged in with the government. Nokia made a deposit of Rs 2,250 crore against the tax demand to secure the release of the factory.

The transfer of the factory to Microsoft can now be blocked again if the tax authorities raise their tax demand against Nokia.

A Nokia global spokesperson said changes imposed by the court would be detrimental to India's reputation as a stable investment destination.

Nokia has also warned that the factory's 30,000 staff could be laid off if the asset cannot be included in the sale of the rest of the company to Microsoft. However, it had been previously noted that it would be quite possible for Nokia to continue to operate the factory as a 3rd-party supplier to Microsoft until the tax dispute is resolved.

At the heart of the dispute is a tax demand for Rs 21,000 crore for software used in Nokia phones. Nokia disputes the demand, citing agreements between India and Finland to avoid double taxation on assets.

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Tags: nokia  India