South Korea’s Kia Motors setting up its plant in Andhra Pradesh has given a major boost to the manufacturing industry while the state was being built from the scrap. The plant has recently held an inauguration event hosting the Andhra Pradesh Chief Minister in December 2019. However, reports that KIA Motors has been facing problems with the new government is now the serious topic in the political circles. News has it that the company had some issues with the policy changes made by Jagan-led government last year. After which KIA has approached the neighbouring Tamil Nadu months after it fully opened. According to the sources, the South Korean automobile company and Tamil Nadu are now in preliminary negotiations.
However, Senior officials with the Tamil Nadu government on Thursday stated that KIA Motors was not in talks with the state to shift its 1.1 billion dollars manufacturing facility from AP. Followed by which YSRCP MP Vijaysai Reddy took to his official social media handles to snub the news.
The rumours being spread by some media outlets about #KIA Motors shifting its plant out of AP are absolutely false. Our Govt. led by Hon’ble CM YS Jagan garu shares an excellent relationship with KIA and we are fully supportive of their growth plans in AP.
— Vijayasai Reddy V (@VSReddy_MP) February 6, 2020
Reuters, an international news organisation on Wednesday reported the news taking references from a few trusted sources from the CMO. Nevertheless, the Tamil Nadu government confirmed that so such talks were held. Condemning the news, Rajat Bhargava, the Special Chief Secretary for Industries and Investments and Commerce in Andhra Pradesh in a press statement said, “The Reuters news is not true. KIA and Govt of AP are working together.”
But the sources at KIA had another story. According to them, Kia was caught off guard in July after the new state government in Andhra mandated companies to reserve 75% of all jobs for locals from the state, making it much harder for the company to find suitable employees. KIA is also having breaks on electricity tax and deferred land payments which were granted by the previous administration.