In the wake of the controversy over the issue of non-payment of incentives promised earlier by Tamil Nadu, Renault-Nissan has said talks were underway with the government.
There were reports that a senior company official had written a letter to the secretary of department of industrial policy and promotion, saying the firm might put its plan to invest Rs 5,000 crore in India on hold, as the state hasn’t paid the promised incentives.
The company committed Rs 4,500 crore when it originally signed a pact with the state. A report stated it had invested over Rs 6,000 crore in its facility near Chennai and the state government has to pay around Rs 1,900 crore as investment promotion subsidy and Rs 822 crore as refund of value-added tax.
A company spokesperson said, “Renault-Nissan is in continual discussions with the government of Tamil Nadu, but we will not be commenting on the details of any talks. India is a major market for us and we are committed to growing our presence. We have already invested significantly to make India a major production hub for the Renault-Nissan Alliance. Any announcement on further investment will be made in due course.”
The company has committed over Rs 4,500 crore when it originally signed its MoU with the State government. However, the report stated that the company has invested over Rs 6,000 crore in its facility near Chennai and the State government has to pay around Rs 1,900 crore as investment promotion subsidy, Rs 822 crore as refund of Value Added Tax.
The plant produces three brands - Nissan, Datsun and Renault. It currently has a capacity of four lakh units, which can be expanded 4.80 lakh units. The capacity utilisation currently is around 60 per cent.
It may be noted that the report also came out at a time when the State government is working towards attracting investors to the State through a Global Investors Meet 2015, targeting to sign MoUs worth Rs 1 lakh crore with the industry.