Nokia in India

Nokia not big on India, sees the market as its "least favourable" for doing buisiness

It would appear that Nokia isn't too keen on India these days. At least from a manufacturer's stand point. The issue at hand seems to be a hefty tax bill that has the Windows Phone OEM considering the country its "least favourable" market to operate in.

Nokia is fighting a $20 Billion rupee tax demand from the Indian Government (about $311 million U.S.). A tax burden that may have Nokia move the manufacturing of their mobile phones to China and import them to the Indian market.

Nokia is the dominant Windows Phone OEM in India (via AdDuplex)

At the heart of the issue seems to be taxation on software downloaded to Nokia's smartphones. Nokia says the software should be taxed in Finland under a treaty with India. India believes the software should be taxed under it's tax laws.

Nokia's presence is rather large in India employing about 8,000 workers in one of the largest plants world wide in Chennai, India as well as a strong consumer market.

The tax dispute with India isn't a Nokia exclusive. India is facing similar challenges from other International companies such as Vodafone and Shell Oil. All likely a result of India's efforts to increase tax revenue by collecting delinquent taxes to help address a growing budget deficit.

Nokia urged the government to "act quickly to correct the wrong perception of India as a place for business".

Source: The Indian Express; via: Times of India; Thanks, Devarshi, for the tip!


Reader comments

Nokia not big on India, sees the market as its "least favourable" for doing buisiness


This is about manufacturing, though. A manufacturing dispute could sway some consumers, but often doesn't. I wish it did, I wish more people were concerned about where their purchases were manufactured.

This controversy is about tax on phones produced in India not sales, Nokia can still sell phones in India by importing from China just like the rest of the world.

Title is a bit misleading. It gives the impression that Nokia isn't much interested in selling phones in India, yet in reality their issues are with manufacturing phones there, not selling.

Headlines like these are found on some of those commercial news channels that are more worried about the number of people watching then the actual content of the story. Sorry WPC, but that's what I felt about the headline after reading the article.

C'mon wpc, pull up your socks. There is no better option for WP news so you really don't need to link bait with such headlines.

Nokia should just shift the production to China and import the phones just like the rest of the world.

Nokia doesn't even produce expensive phones in India, all Lumias are imported from China and only Ashas are produced in India.

Ashas are the major source of Nokia's stability in market.. If they only sold lumias, nokia would have nosedived long before

so? Nokia can just import from China just lke the rest of the world, why special consideration for India?

I don't mind that either... It would rather be a loss to india.. I was just saying that asha should not be underestimated..

Because of importing expenses. If they manufacture devices in India and sell them in India, they don't have to worry about transportation. If they move to China, then they will have to pay transportation expenses.

Which would be same if they pay the extra taxes.. I guess. And if transportation charges increase, people in India wont buy asha..

You spelled "spelled" wrong, unless you were talking about the spelt the crop, in which case your sentence doesn't make sense. 

Spelt is used in British English, Spelled in the US English; it is an irregular verb as To burn, To dream, To clap etc.

Spelt is the same as spelled, and correct as the past tense of spell. It's not just a "British" thing but used interchangeably with spelled in most English-speaking countries like the U.K., Ireland, Australia, New Zealand etc. Even lists it, and that is typically biased toward US spelling. Next you'll be telling us that "colour", "civilised", "grey", and "aluminium" are spelt incorrectly.

If he is in the United States then he "spelled" it incorrectly. Anywhere else he "spelt" it correctly. Pretty sure he screwed up "hey" globally.

Thanks for the clarification guys, I was wondering how he had managed to misspell so many words improperly, but thankfully it was just my lack of experience outside of America except for India, which tended to be more Telugu based than English... so.... ne ways thanks guys

I really have no idea what's going to happen here.. Rupee has really become cheap here.. It was 60₹vs$ just a week ago and now we are at 64

Learn to read, this is related to taxes on phone manufacturing not currency exchange rate.

Dude take time and guess why they are increasing taxes?? Because of budget deficit.. And falling ₹is a direct indication of it.. This wouldn't have happened if ₹ would have gone so low

Cause and effect, rupee is nosediving because of the stupid anti-business policies and gold price controls, capital thereby flees India, causing the rupee to depreciate.

True.. Now India cant even reverse it(i guess) releasing these charges would only push it further down.. Which would compel investors to further withdraw shares rather than see that the policy is more liberal.. I don't much about finance so i maybe terribly wrong..

Lol.. And i don't even know anything about economics(neither i want to).. But i do care if i would have to pay more for everything.. Especially lumias..

India is digging their own grave if they're upping taxes so much that businesses are considering moving their manufacturing out of there.

Thats not increasing tax.. thats because of the fact that they can not pull money out of corrupt practices, so better target such foreign companies and invade them for taxes.

My 11 year old used to laugh at the manufacturer tags (back when he was 7) if it didn't say "Made in China". E.g. "Look dad! this one's not made in China."

This is not about selling handsets but about production of handsets. Nokia hasn't learned how to do business in India. They have to learn a lesson on how to keep the Indian royal family happy. All their worries will disappear the minute they learn this lesson.

It really doesn't affect nokia as much it affects India.. It would be a loss in taxes to India anyways if nokia leaves it..

Hope everything ends up well for them, we don't want our Indian fellows to suffer over buying a Windows Phone.

Thanks.. Mobile phone rates are already high here.. Thanks to taxes.. The expected price of lumia625 is the same as the current price of Lumia 820..

Sucks that your government chose the wrong way to make up for those losses. They are supposed to attract business, not drive it away..

I hope this does not compromise Nokia's windows phone lineup in India.Nokia have already gone crazy by pricing their lumia devices very high in India.Why is 925 more expensive than 920 ? And why is 625 as much as an 820?Pricing is key and Nokia is screwing themselves.No wonder Galaxy S4 is selling like hot cakes in India while nobody is touching hi end Lumias.L520 is the only VFM product from Nokia.

And this is what happens when you start moving factories from Europe to India and China just because of the labour you get in third world countries.

I'm sure it will still make more sense to get it manufactured there compared to Europe or US. They will complain about it and move to China or Brazil or Indonesia. Lots of places to go.

There is also little point in shipping components from far east to Europe, assembling the phone, and then shipping them back.

Im from Chennai where nokia has the plant,yes there is some hardship for nokia sue to tax issues levied by the govt. But Nokia's factory is rather large in terms of infrastructure,labour and investment

Ìndia is milking all western companies there with their made-up lawas and taxes. Nokia better move their production to China. At least they behave well.

The truth is that lot of companies( big & small, indian & MNC ) have not paid their taxes in last few years. They have used the various loopholes in tax interpretation and a corrupt government never sent timely notices.
. Now since the elections are coming and the ruling party doesn't have funds for implementing popular schemes, they started sending tax notices with retrospective clauses, adding upto huge sums.

so the bottom line is Nokia is wrong here and will have to shell out those amounts if the matter is settled by the courts. So they are now trying the pressure tactics (like investment, jobs). Nokia wouldn't have done this in western countries but took their chances in India. But their is a saying " taxman and wife never forgets", and it applies globally.

... Nothing against Nokia. I am proud lumiannaire.

Nokia only makes feature phones in their Indian plant. 5 years down, I don't think they or any company will anyway be making feature phones.

Governments trying to tax something not created in their country but elsewhere are just thrives. If they keep it up we should tax all their Call Centers and Radiologists - see how they feel about that

Typical corporate greed. We want to pull money out of your country but don't ask us to give any! If they move to China then each of those phones they try to sell should be heavily taxed.