India, UK in Talks to Resolve Vodafone's $6B Tax Dispute Ahead of Starmer's Visit
British Prime Minister Keir Starmer's impending visit to India has sparked renewed efforts to resolve a long-standing financial dispute between India and Vodafone Group's local subsidiary. The Indian government is now leading negotiations for a one-time settlement payment.
The dispute centres around India's calculation of annual adjusted gross revenue (AGR) for telecom operators, with Vodafone Idea, the merged entity of Vodafone Group's local subsidiary and Idea Cellular, struggling with debts since 2016. The Indian government, now a 49% shareholder in Vodafone Idea, is prioritising a resolution.
To facilitate this, officials are drafting a framework to circumvent potential legal challenges from other telecom operators also owing AGR payments. Meanwhile, uncertainty in US-India trade conditions has led some US tech giants to delay data centre deals in India.
A resolution in the dispute, potentially through a waiver of interest and penalty fees, would not only benefit Vodafone Idea but also serve as a strategic diplomatic move to strengthen India's relationship with the UK ahead of Starmer's visit. The Indian government's active role in the negotiations signals its commitment to finding a swift and mutually beneficial solution.
