Nissan sues Indian government for over $770 million seeking unpaid state incentives.

Nissan Terrano Specifications
Along with the Terrano, Nissan also manufactures the Micra hatchback and Sunny sedan in India

Nissan has begun international arbitration against the Indian Government seeking over $770 million (approximately Rs. 5000 crores) in a dispute over unpaid state incentives. The company’s chairman Carlos Ghosn, had also sent a legal notice to the Honourable Prime Minister of India, Shri Narendra Modi in July 2016 seeking for the payment of incentives due from the Tamil Nadu government but there has been no response from the Prime Minister’s office as well in spite of several meetings between the federal and state officers and Nissan officials.

Officials from Nissan were assured that the payment would be made provided the company did not bring a legal case. However, as there were no actions from the Government, the Japanese automaker gave India an ultimatum to appoint an arbitrator and that the first arbitration hearing will be held in mid-December. The case has now been brought against India for violation of its Comprehensive Economic Partnership Agreement with Japan.

In 2008, Nissan and Renault agreed to jointly set up a car manufacturing facility in Chennai and the State Government had promised various tax incentives including some tax refunds. Over 7 years, both the automakers have invested $946 million (Rs. 6100 crores) and set up a manufacturing plant with an annual production capacity of 4,80,000 vehicles, which entitled them to receive the incentives in 2015, according to the legal notice.

Nissan has incurred significant and increasing losses and in its notice is claiming Rs. 2900 crores in unpaid incentives and Rs. 2100 crores in damages, plus interest and other costs.

Nissan Sues Indian Government

– Nissan has sued the Indian Government for over $770 million
– The carmaker has filed a suit seeking payment of unpaid state incentives
– The company claims that it has created more than 40,000 direct and indirect jobs in India

Datsun redi-GO Gold
Datsun cars are also being manufactured at the plant in Chennai