Tamil Nadu govt in talks with Foxconn, other companies

State 'clear and optimistic' on revival, says official

Almost 18 months after the mobile handset manufacturing unit of Nokia India suspended operations at the Special Economic Zone facility in Sriperumbudur, near here, the Government of Tamil Nadu is in talks with at least four or five companies to revive the manufacturing facility.

That includes Taiwan-based contract electronics manufacturer Foxconn. A media report says officials from Centre and state have met the Taiwanese firm's head, Terry Gou.

“The state government is very clear and optimistic on revival of the plant as quickly as possible,” said an official, on condition of anonymity. Asked about the Gou meeting, he said, “I am neither denying nor confirming.” An e-mail to Foxconn elicited no response.

Another official said while the talks were on, Foxconn had moved to get a part of its existing facility in the SEZ denotified. Last year, officials said the company wanted to convert the land into a Domestic Tariff Area, to be able to service the Indian market.

According to a former employee union leader of Foxconn’s Chennai facility, a Foxconn entity, Foxconn Hon Hai Technology India Mega Development, with registered office in Mumbai, has called for people to join its workforce on a contract basis to produce parts of the mobile phones it manufactures (Rising Stars Mobile India), in Tada, Andhra Pradesh.

Foxconn, involved in manufacturing activities in the state for several years, had suspended operations in its facility in the Nokia SEZ after a fall in orders. Its main customer was Nokia, which suspended its operations at Chennai due to a tax dispute and could  not transfer this faciliity to Microsoft in their global sale agreement. Nokia, once an iconic mobile handset maker, decided in 2014 to shut down its Sriperumbudur unit in the absence of orders from its new parent firm, Microsoft. In late December, 2014, Foxconn also stopped operations in the SEZ.

Microsoft formally bought Finland-based Nokia's global devices and services business, including assets in India, for $7.2 billion on April 25, 2015. However, the Chennai facility was put on a freeze by the central income tax department, following a dispute on claims -- the latter had slapped ad Rs 23,000 crore bill and the state government gave another for Rs 2,400 crore.

Tamil Nadu  Chief Minister Jayalalithaa met Prime Minister Narendra Modi  on Tuesday. During the meeting, she gave a 94-page, 29-point memorandum to Modi.

Among the 29 points, she had mentioned about the Nokia unit, too: “The Nokia factory at Sriperumbudur in Tamil Nadu was one of the largest manufacturing facilities for mobile phones in the world. The government of Tamil Nadu signed a MoU with Nokia on April 4, 2005, and with the support of the state government, a global electronic manufacturing hub was developed. Unfortunately, retrospective amendments to tax laws brought in 2012 by the then United Progressive Alliance government forced the Nokia plant to shut down in November, 2014, causing more than 15,000 direct employees to lose their jobs. You (PM Modi) had announced in the Rajya Sabha in February, 2015, that the government of India will take all necessary steps to revive the Nokia unit. Foxconn have recently come forward to take over and revive the plant. To enable such a takeover, the government of India would have to facilitate the defreezing of Nokia’s assets, frozen by an order of the Delhi high court in an income tax (I-T) case, by arranging for the proceeds of the sale/lease transaction to be paid into a separate escrow account to meet the final tax liabilities. Such a course of action will ensure that the existing plant is utilised, jobs restored to thousands of persons and production commenced immediately.”

“Your (Modi’s) direct intervention is essential to ensure that the I-T authorities support the initiative of the state government to revive a global manufacturing facility and restore the electronic manufacturing hub at Sriperumbudur.”