Prime Minister Manmohan Singh and Congress President Sonia Gandhi on Saturday visited Nokia's handset manufacturing facility in Sriperumbudur.
Union sources claimed production at the Chennai plant, considered one of the biggest for Nokia, had declined from 13 million handsets per month to four million per month.
Last Friday, the apex court had ordered Nokia to give a Rs 3,500-crore (Rs 35-billion) guarantee before it transferred its Sriperumbudur facility, one of its biggest plants globally.
The workers who were hired straight out of school as unskilled labourers are now struggling to find alternative employment because they lack skills.
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.
Workers had gone on strike yesterday, demanding better wage settlement terms and reinstatement of workers suspended in January this year. Nokia India Employees Progressive Union was spearheading the strike.
In the factory, workers said Friday was the last day as far as production was concerned.
While the tax holiday for the factory coming to an end might be a factor, many say the business model of Microsoft (which acquired Nokia's handset division last year), as well as freebies offered by the Vietnamese government, might also have played a role.
Nokia India has seen exports from its telecom Special Economic Zone at Sriperumbudur near Chennai reach Rs 1,650 crore (Rs 16.50 billion) in 2006-07, according to figures provided by the Madras Exports Processing Zone.
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.
Nokia's Sriperumbudur factory is its largest in the world.
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This is the third meeting between the two parties, including one in which the Company Law Board had taken part.
The Nokia India Employees Progressive Union held discussions with the management on Monday. "The wage settlement offered by company is quite low. We are not happy with that," said Union sources.
Unions will 'fight to death' if company 'decides' to shut Chennai factory.
The facility is considered to be one of the largest manufacturing units of the handset major.
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.
Last week, Nokia offered financial help to employees who wished to explore opportunities elsewhere
About 900 employees would lose their jobs following the suspension of operations at the plant.
Fate of factory, 8,000 workers remains uncertain.
Nokia is keen to shift its Chennai plant to Vietnam.
Industries Minister P Thangamani told the assembly. He was responding to a query by A Sounderrajan of CPI-M.
Following in Apple's footsteps, Alphabet - Google's parent company - is in advanced talks with Foxconn to manufacture Pixel smartphones in Tamil Nadu, an industrial state which will also double up as drone-manufacturing hub for the US tech giant soon. According to a state government release, officials from Google will soon visit Chennai to meet Tamil Nadu Chief Minister MK Stalin to hold discussion on manufacturing of Google Pixel near Chennai.
Nokia shut down has also resulted in the loss of job for over 12,000, who were indirectly employed by the company.
he company said that though Katama has decided to quit, he would play a consulting role for a 'fixed' period.
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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.
Nokia said that it will be informing all stakeholders including the Labour Commissioner of the suspension.
Union Commerce Minister Nirmala Sitharaman said she will pursue the matter with the finance ministry
Employees at Nokia's Chennai plant are not so keen to shift their base.
The Nokia plant near Chennai started operations in 2006.
Prime Minister Narendra Modi's desire to showcase India as a destination for manufacturing is well understood.
The Department refused to allow transfer of the plant till the dues claimed by the department are not remitted by the company.
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Besides staging a hunger strike on March 31 in Chennai, the Nokia India Employees Union have decided to further step up their protest post the Lok Sabha elections.
The arbitration clause is present in almost 95 per cent of corporate agreements, according to tax and audit firm Ernst & Young.
The development comes at a time when growing tension in US-China trade ties is forcing companies to explore alternative manufacturing sites in order to derisk operations.
Tax problems and unfavourable WTO agreements are making Tamil Nadu's electronics corridor less attractive to companies.
Trouble began at the manufacturing facilities of Foxconn situated at Sriperumbudur near Chennai after it decided to suspend production from December 22, 2014. Fearing job losses the employees have been resorting to agitations since then.
Sony Ericsson, a leading Japanese-Swedish mobile handset maker, is all set to produce its mobile handsets in Sriperumbudur through manufacturing agreements with Flextronics and Foxconn.
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