Nokia's Chennai plant is under freeze over tax dispute.
Finnish phone maker Nokia may have to exclude its Chennai plant from the $7.2 billion deal with Microsoft if tax issues facing the India unit are not resolved by next week.
Finnish handset maker Nokia became the centre of a tax scandal as a team of Indian Income-Tax officials on Tuesday raided its factory near Chennai on charges of alleged tax evasion worth Rs 3,000 crore (30 billion).
Nokia's Sriperumbudur factory is its largest in the world.
The facility is considered to be one of the largest manufacturing units of the handset major.
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On March 14, the Supreme Court had ordered Nokia India to give Rs 3,500 crore (Rs 35 billion) as guarantee before it transfers the plant to Microsoft.
The employees backed by the Centre of Indian Trade Unions have been on strike since June 7 demanding union recognition, reinstatement of some suspended workers and wage hike, CITU office-bearers said.
In the factory, workers said Friday was the last day as far as production was concerned.
Last week, Nokia offered financial help to employees who wished to explore opportunities elsewhere
The warning came after Nokia Chairman and interim chief executive officer Risto Siilasmaa met Commerce Minister Anand Sharma and tax authorities in a bid to resolve the Rs 21,153-crore (Rs 211.53 billion) liability it faces.
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Employees at Nokia's Chennai plant are not so keen to shift their base.
Nokia may be allowed to sell Chennai mobile plant.
Nokia said it was the first to manufacture the 5G New Radio in India, and it is now producing Nokia AirScale massive Multiple Input Multiple Output solution at the facility.
Nokia started operations at Sriperumbudur plant near Chennai, the second biggest facilities by any global firm, in 2006 after Korean auto major Hyundai's came up with its plant in the late 1990s.
The deal with Nokia will be signed in San Francisco on Friday morning in the presence of Tamil Nadu Chief Minister M K Stalin, who is on a 17-day trip to the US to attract fresh investments.
According to a release issued by Nokia, the investment is geared towards enhancing the capacity of the manufacturing plant. The plant currently employs approximately 6,000 people.
Nokia said that it will be informing all stakeholders including the Labour Commissioner of the suspension.
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The Chennai plant may be excluded from software giant Microsoft's acquisition of Nokia's handset business for 5.4 billion euros due to tax issues.
Nokia shut down has also resulted in the loss of job for over 12,000, who were indirectly employed by the company.
The decision to shut down the Chennai plant will reduce valuation of Nokia for Microsoft
Nokia India is likely to ramp up its Chennai facility with an investment of $170 million over the next 18 months to upgrade machinery and enhance capacity.Nokia, which is planning to launch about 30 handsets in the next six months, expects its handset prices to fall by 20 per cent every year.
he company said that though Katama has decided to quit, he would play a consulting role for a 'fixed' period.
Nokia, the Finnish mobile handset major, is planning to locate its Network Operations Centre, for Asia operations, in Chennai, Union Minister for Communications and Information Technology, Dayanidhi Maran, said on Monday.\n\n
Indian and Finnish finance ministry officials on Tuesday discussed Nokia's Rs 21,153 crore (Rs 211.53 billion) tax dispute case and reviewed the double taxation avoidance agreement.
The Nokia India facility in Chennai, one of the largest manufacturing facilities of the company globally employs 8,000 people, of that 50 per cent are women.
In a separate tax case, the Supreme Court had ordered Nokia India on March 14 to give a Rs 3,500 crore or Rs 35 billion guarantee before it transfers the plant to Microsoft.
Prime Minister Narendra Modi's desire to showcase India as a destination for manufacturing is well understood.
Nokia on Tuesday announced that it will establish a high-end base station controller (BSC) manufacturing unit in Chennai, India.
Nokia is keen to shift its Chennai plant to Vietnam.
Nokia may now not sell its Chennai unit.
Industries Minister P Thangamani told the assembly. He was responding to a query by A Sounderrajan of CPI-M.
The centre will offer network operation services to its global customers, which will be operational in the first quarter of next year with 100 professionals.
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The two companies have received most of the required regulatory approvals, including clearances from the European Commission and the US Department of Justice.
According to a top DoT official, there have been random checks at different factories of different handset makers and respective teams have submitted their reports.
Fate of factory, 8,000 workers remains uncertain.
Global mobile handset major Nokia on Wednesday announced that it will set up a manufacturing facility for mobile devices at Chennai in India.
Reliance Jio is close to finalising its contract with telecom gear maker Ericsson to roll out its 5G network in Mumbai and Maharashtra and Kolkata and West Bengal in the first phase of its launch in October. And it is going with Nokia for the lucrative Delhi circle, and Chennai, which includes Tamil Nadu, say sources aware of the development. This is the first time that Jio is opting for multiple vendors.
Telecom gearmaker Nokia will boost its manufacturing capacity in India by 1.5x over the next few years to support the 5G services roll-out, said Tarun Chhabra, the company's country head of mobile networks business. Nokia is supplying network equipment to Bharti Airtel and Reliance Jio for their 5G networks from its plant in Chennai. Vodafone Idea is yet to finalise its contract as it awaits fresh funding.
About 900 employees would lose their jobs following the suspension of operations at the plant.
Unions will 'fight to death' if company 'decides' to shut Chennai factory.
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