According to the Telecom Equipment and Services Export Promotion Council (TEPC), the uncertainty over future of Nokia?s Chennai manufacturing plant may result in a decline in India?s telecom exports by about 40 per cent.
The handset manufacturer plans to close the $7.2 billion deal with Microsoft, which involves sale of Nokia?s mobile devices and services business to latter, on April 25, 2014. Under the deal, Nokia?s handset and other asset components will be handed over to Microsoft?s Finland-based entity Microsoft Mobile Oy. However, it?s not clear yet if the transaction will include Nokia?s Chennai plant, which is facing a Rs 210 billion tax dispute with the Indian government over royalty payments.
TEPC claims that in the backdrop of the ongoing tax dispute, the country witnessed a decline in its telecom exports due to lower contribution from Nokia, which generally accounts for about 70 per cent of the country?s total handset exports.
According to data released by TEPC, telecom equipment exports from India declined by seven per cent from Rs 210.75 billion in 2012-13 to Rs 196.54 billion in 2013-14. TEPC has stated that mobile handsets account for more than half of the telecom exports from India, and majority of these belong to Nokia. Mobile phone exports declined from Rs 148.7 billion in 2012-13 to Rs 111.98 billion in 2013-14.
