Finnish phone maker Nokia has become the latest foreign telecommunications company to face tax issues in India.
The firm's Chennai factory, one of its largest manufacturing facilities, has been raided by Indian tax officials.
According to some media reports, officials said they were looking to recover tax payments totalling as much as 30bn Indian rupees ($545m; £340m).
Nokia said that it always observes "applicable laws and rulings in the countries where we operate".
It added that it was fully cooperating with authorities "to ensure they get the necessary information to help in their inquiry".
Nokia's shares fell more than 6% to 3.07 euros in Helsinki after news of the tax raid emerged.
India is one of the fastest growing mobile phone markets in the world and is key to Nokia's future growth. The firm has been present in India since 1995 and is one the market leaders.
It set up the Chennai factory in 2006, and the unit produces various models, including smartphones targeted at consumers in emerging markets.
The raid on Nokia comes just days after Indian tax officials asked the UK's Vodafone to pay more than $2bn in back taxes.
The demand is the latest twist in a legal tussle that has been going on for more than five years, and has drawn criticism from foreign investors and analysts.
They complain that India's tax regime is causing confusion and may deter foreign firms from trying to develop the domestic market.
For its part, India has previously said that it will look at ways of clarifying its tax laws.