A decision on the site of the new plant would be taken by March-end, top company officials said.
"We are in talks with various state governments for finalising the location of our proposed manufacturing plant. A decision is expected by the end of current quarter," Sanjeev Sharma, managing director, Nokia India, told reporters on the sidelines of a CII function.
He said the company is looking for a site that provides an ideal mix of good infrastructure, logistics availability and skilled manpower.
Besides, the company is also expecting a host of tax incentives from the state government to kick-start its manufacturing activities.
Sharma agreed that tax incentives would be an important factor in the choice of location, but refused to give the names of the states high on the company's priority list.
"Everything is being negotiated and evaluated at the moment," he said.
In December, Nokia announced an investment of up to $150 million over the next four years in setting up a manufacturing facility in India, which would give employment to about 2,000 people.