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Japanese carmaker Nissan is set to become the latest foreign company to pursue international arbitration against India’s government, after losing patience over an investment incentive payment from a state government.

According to two people with direct knowledge of the situation, Nissan’s planned action relates to a 2008 agreement with the government of southern Tamil Nadu state, which led to its opening of a large car plant near Chennai two years later.

Nissan believes that the agreement entitled it to about $770m in incentive payouts from the state government, but after two years of failed entreaties to both state and national administrations – including a personal appeal to Prime Minister Narendra Modi – the company is now planning to pursue international arbitration. Its decision was first reported by Reuters.

Other companies pursuing international arbitration against India include UK-based Vodafone and Cairn Energy.

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