Tax tiffs cast a cloud over foreign companies in India

Mumbai

FOREIGN companies tempted by India's call to scale up manufacturing in Asia's third-largest economy need to consider one big potential headache: tax.

Nokia OYJ, Vodafone Group Plc, Cairn India Ltd and Cadbury chocolate maker Mondelez International Inc are among those embroiled in tax spats for total claims of about US$10 billion. A separate row flared this month with foreign portfolio investors over demands for US$95 million on past capital gains.

Prime Minister Narendra Modi has pledged a friendlier tax regime since taking power a year ago as he woos investment, but officials on the ground also face pressure …