Renault-Nissan puts on hold Rs 5,000 cr India plan
At a time when the government is pulling out all the stops to attract investments under its Make in India campaign, automobile major Renault-Nissan India has put on hold its plans to invest Rs 5,000 crore in the country.business Updated: Mar 10, 2017 11:04 IST
At a time when the government is pulling out all the stops to attract investments under its Make in India campaign, automobile major Renault-Nissan India has put on hold its plans to invest Rs 5,000 crore in the country.
According to Renault Nissan Automotive India Pvt Ltd (RNAIPL), the Tamil Nadu government has been slow in paying outstanding dues to the company for the last two years. The auto maker has sought the Centre’s intervention to recover its dues.Renault-Nissan India invested over Rs 6,100 crore in its Chennai facility, and the state government was to provide investment promotion subsidy (IPS) to the company in the form of refund of gross value-added tax (VAT) and central sales tax (CST) paid by the consortium. However, the state government still owes the auto maker Rs 1,901 crore in IPS and Rs 822 crore in input VAT, according to the company.
“The amount outstanding is significant and continues to cause huge negative implications to our operations in Tamil Nadu as well as to our future growth plans in India,” a senior company official recently wrote to Amitabh Kant, secretary, Department of Industrial Policy & Promotion (DIPP). He informed Kant that the executive committee of the company recently approved additional investment of up to Rs 5,000 crore in India “only subject to expeditious payment of our outstanding incentives”.
“On the expeditious resolution of this issue, we will focus on the second phase of expansion in India, which will result in additional investments as well as job creation in the country,” the company said.
Kant is learnt to have taken up the issue with the Tamil Nadu government.
State government officials said they were “aware of the issue” and remained “committed” to make payments to the company but were non-committal on any timeframe. “Implementation will take some time,” a senior official told HT.
(With inputs from KV Lakshmana in Chennai)