Japanese car giant Nissan Motor has sued India in a dispute over unpaid state incentives of more than $770 million, reported Reuters.
In a legal notice sent to PM Modi, Nissan sought payment of incentives due from the Tamil Nadu government as part of a 2008 agreement to set up a car manufacturing plant in the state.
Japanese car giant Nissan Motor has sued India in a dispute over unpaid state incentives of more than $770 million, reported Reuters.
In a legal notice sent to PM Modi, Nissan sought payment of incentives due from the Tamil Nadu government as part of a 2008 agreement to set up a car manufacturing plant in the state.
The auto major today said it is committed to working with the Indian government to resolve the dispute.
The Reuters reported that the legal notice says that Nissan earlier had requested the TN state officials to complete the payment, due in 2015, several times. But, every time the state overlooked the matter.
"In March 2016, the company’s chairman, Carlos Ghosn, had a meeting with PM Modi to seek help/assistance from the government but that too did not yield any results," the notice adds.
Tamil Nadu is currently facing several other issues, the most recent being cyclone Ockhi which killed eight in the state.
In 2015, the year Tamil Nadu had to pay Nissan all the dues, the state was hit with unprecedented rains and floods, killing over 340 people. The DMK had then blamed the state government, led by Jayalalithaa, for the flooding.
Political upheavel, after the death of former Chief Minister Jayalalithaa last year, could also prove to be an issue requiring priority of the state officials.
However, after receiving the legal notice from Nissan, state officials and several other ministries have assured the car giant that the payment would be made and had asked the automaker company to not file any legal case against the state officials.
“There is no discrepancy with regard to the amount due, and we are trying hard to resolve the issue,” Reuters reported quoting an official as saying.
About the 2008 Agreement:
In 2008, Nissan and its global alliance partner, French carmaker Renault, agreed to invest in setting up a car plant in Chennai to which the state government promised that the company will be given several incentives including some tax refunds.
Both Nissan and Renault invested 61 billion rupees ($946 million) for a period of seven years, which entitled them to receive the incentives in 2015. But, the state failed to provide the company with the promised incentives and tax refunds.
The company then in August 2017, sent an ultimatum to the Tamil Nadu state officials seeking their reply about the dues but the state overlooked the company's request repeatedly.