Centre Weighs Relief Package For Vodafone Idea To Settle ₹2 Trillion AGR Dispute: Report

India is reportedly exploring a one-time settlement of its long-running ₹2 trillion dispute with Vodafone Idea, in a move aimed at strengthening economic and diplomatic ties with the United Kingdom.

The proposed resolution could involve waiving interest and penalties, followed by a partial concession on the principal dues, though discussions remain confidential. Officials are currently drafting the framework and considering legal safeguards to prevent similar demands from other telecom operators with pending dues, according to a Bloomberg report.

AGR Dues

The dispute stems from the method of calculating Adjusted Gross Revenue (AGR), a share of telecom operators’ revenue paid as license and spectrum fees. Vodafone Idea, which hasn’t reported a quarterly profit since 2016, has been weighed down by these liabilities.

A favorable settlement could boost investor confidence and open doors for fresh capital infusion, helping stabilize India’s third-largest telecom operator.

Officials have publicly acknowledged the need for a solution, with the Centre recently telling the Supreme Court that “some resolution may be required” as public funds are involved.

The company was set to appear before the Supreme Court today with regard to the AGR dues, but the apex court adjourned its hearing to October 13, after the Centre sought more time. The debt-laden telecom firm had petitioned the Supreme Court to quash the Department of Telecom’s (DoT) ₹9,450 crore additional AGR demand, arguing it exceeds the scope of the court’s earlier ruling on AGR liabilities.

UK PM Visit This Week

The settlement talks come ahead of UK Prime Minister Keir Starmer’s visit to India. With India looking to deepen ties with the UK amid tense relations with the US and a cautious reset with China, a favorable outcome could have both economic and strategic payoffs.

The stock closed 4% lower on Monday, having added 16.2% over the past month.

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