NEW DELHI (Reuters) - Nissan Motor Co (7201.T) and authorities in an Indian state are close to settling a dispute over which the Japanese carmaker initiated international arbitration seeking more than $729 million in unpaid dues and damages, sources told Reuters.
FILE PHOTO: The logo of Nissan Motor Co is seen at its showroom in Tokyo, Japan February 9, 2017. REUTERS/Toru Hanai/File Photo
Under the proposed settlement, which could be finalised as early as this week, Nissan would take a lower payout of about 20 billion rupees ($292 million) in unpaid dues and forego sums it has sought in damages, two sources aware of the matter said.
The resolution would be a victory for Prime Minister Narendra Modi, who faces a general election next year and has spent the last four years trying to transform India’s image as a business-friendly nation.
Nissan sent a legal notice to the Modi government in 2016 seeking payment of incentives it said it was due from the government of Tamil Nadu as part of a 2008 agreement to set up a car manufacturing plant in the southern state.
The carmaker, in its notice, had claimed 29 billion rupees ($423 million) in unpaid incentives and 21 billion rupees ($306 million) in damages, plus interest and other costs.
The Tamil Nadu government has since paid some money and now owes Nissan about 20 billion rupees in unpaid incentives, one of the sources said.
According to the proposal the two sides are close to agreement on, the state would pay the automaker 3 billion rupees upfront once the deal was signed, with the remainder paid by the end of 2019 in 10 installments, the sources said.
Nissan would drop the arbitration case against India once the settlement
