Taiwan’s Foxconn is in talks with Nokia and government officials in India about restarting handset production at a factory near Chennai that was closed in 2014 due to a tax dispute between the Finnish company and Indian tax authorities.
According to the Economic Times, Foxconn is pushing for a waiver of Nokia’s tax liabilities and a resolution of legal issues at the state level. It also wants the special economic zone to be converted into a domestic tariff free area that will allow mobile phones and telecoms equipment to be sold locally instead of only being exported.
Foxconn also has asked the Tamil Nadu government to declare the facility a state utility and handle all labour-related issues, the Times said.
The plant previously had an annual capacity of 100 million handsets and employed up to 12,000 people.
Officials from the IT and electronics ministry reportedly will meet Foxconn chairman Terry Gou this week in Taiwan.
Foxconn, the world’s largest contract electronics manufacturer, has been in talks with Nokia since June, but both firms said any deal will need full the support of the Tamil Nadu government and government of India and the asset freeze to be lifted, the Times reported.
Foxconn first expressed interest in the Chennai factory nearly two years ago.
A year ago it announced plans to invest $5 billion over five years in a factory in the state of Maharashtra, in west India, which will employ up to 50,000 people.
Chinese telecoms equipment and smartphone vendor Huawei announced last month it will start producing Honor smartphones in Chennai in October.