Indian officials have raided the Finnish phone maker’s Chennai factory over alleged tax issues.
It has been reported that the site, which is one of Nokia's largest manufacturing facilities, was raided in order to recover tax repayments of a total close to 30bn Indian rupees (£340m).
Following the raid, Nokia's shares fell by more than six per cent, down to 3.07 euros.
Nokia is the latest telecommunications firm to face tax issues in the country, as last week saw Vodafone ordered to pay up over $2bn in unpaid taxes.
India has quickly become one of the worlds most rapidly developing mobile phone markets, and is a key area for Nokia, who has operated in the country since 1995.
In response to the raid, Nokia has stated that it always considers "applicable laws and rulings in the con tries where we operate".
Inda's tax programme has often caused controversy in the past, with many foreign investors citing their confusion over it and their reluctance to move into the market as a result.
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