Foxconn wants Nokia's frozen Chennai plant, but without the hassle

There has been plenty of news around China’s Foxconn wanting to set up an assembly plant in Navi Mumbai . But Foxconn seems to want more and is also in talks with Nokia. The Economic Times reports that discussions are on between the two companies about the reopening of Nokia’s Chennai plant that has been shut for years, but Foxconn has plenty of terms to discuss.

The Chennai plant, located in Sriperumbudur has been shut due to tax-related issues and was not even a part of Microsoft’s $7.5 billion acquisition of Nokia’s mobile division. According to insiders, Foxconn demands complete exclusion from legal issues and financial liabilities that the Finnish giant faces in India. In addition, the government will also need to lift the asset freeze on the plant.

But there’s more, as all of the above comes after the land is converted from a Special Economic Zone (SEZ) to a Domestic Tariff Area (DTA). This is needed if smartphones are to be produced and sold in India.

At the end of it all, even if Nokia does manage to accomplish all of the above, Foxconn has yet to decide if it will be buying or leasing the factory.

Going back in time, the plant was shut down in late 2014 over a Rs 21,000 crore tax dispute with the government. 12,000 jobs were also lost in the process. When operational, it was once the world’s largest mobile phone manufacturing facilities and was supplying over 70 percent of parts to Nokia.

In addition to the above, Tamil Nadu chief minister J. Jayalalithaa in June sought for Prime Minister Modi’s intervention so that income tax authorities play nice and someone gets the plant up and running, bringing life back to Sriperumbudur’s ghost plant, bringing in more jobs.