Nissan was allegedly promised to collect a massive incentive from the state government to set up a car production plant Advertisement Nissan has filed a lawsuit against India looking for an amount of more than $770 million (Approximately Rs. 8,000 crore) over an unpaid state incentive issue. Nissan claims, this incentive was guaranteed to the brand back in 2008 by Tamil Nadu government for putting up a car manufacturing plant in the state and the incentive was essential for the project’s feasibility and sustainability.

 

Nissan also says that regardless of its repetitive requests to the state officials for the payment, the state government didn’t pay heed. Yet Renault-Nissan Alliance chairman Carlos Ghosn too appealed Prime Minister Narendra Modi for federal assistance on the issue. However, that endeavor too didn’t bring any positive consequences.

However, in August Nissan got to international court to resolve the matter and it gave India an ultimatum to assign an arbitrator. Now the first arbitration hearing will be in mid of this month.

Talking about the issue, a senior Tamil Nadu government official has uttered they are working to resolve the dispute. Advertisement Currently, there are more than 20 international arbitration proceedings going on next to India by international investors and Nissan’s lawsuit comes as the latest one.

This dispute among the Tamil Nadu government and Nissan point towards the difficulties the companies face as investing here.

Despite the fact that the central government has been trying to entice the investors to invest here, such disputes certainly make dent in the country’s image. However, such incident could influence the image of the city and the state too. Currently, quite a lot of automakers counting global majors like Ford and Hyundai have their production hubs in the state.