Here’s Why Nissan Has Sued The Government Of India For Rs 5,000 CroreNissan is a Japanese automaker. (Robert Cianflone via Getty Images)

Japanese carmaker Nissan has begun international arbitration against India to recover dues amounting to Rs 5,000 crore after multiple failed appeals to state and national government, as reported by Reuters.

The dispute stems from unpaid state incentives by the Tamil Nadu government in the form of tax refunds among others. The company had setup a car manufacturing plant in Chennai in 2008 under an agreement with the then DMK government and invested Rs 61 billion towards the same over the next seven years.

The company was due to receive the incentives in 2015, and has stated that non-payment had led to ‘significant and increasing’ losses for the company. The carmaker has claimed Rs 2,900 crore in incentives and Rs 2,100 in damages along with interest and other costs in it’s notice.

Several automobile manufactures have their manufacturing plants in Tamil Nadu, including Ford and Hyundai. The Nissan plant had led to the creation of 40,000 direct and indirect jobs in the state according to the company.

A senior state official has admitted that there is no discrepancy with respect to the amount due, and that the government hoped to resolve the issue without international arbitration. However, the current legal notice follows several meetings between federal and state officials and Nissan executives which failed to yield any result.

A Nissan spokesman said the company was “committed to working with the government of India toward a resolution”.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber