Foxconn pursues India incentive despite withdrawing from Vedanta venture

Foxconn said on Tuesday it plans to submit an application to access incentives under India’s semiconductor manufacturing policy even as the Taiwanese giant has pulled out of the nation’s flagship $19.5 billion joint venture with local conglomerate Vedanta.

“Foxconn is working toward submitting an application related to the ‘Modified Programme for Semiconductors and Display Fab Ecosystem.’ We have been actively reviewing the landscape for optimal partners,” the company said Tuesday in a statement.

“We welcome a diverse set of stakeholders, both inside India and abroad, who also want to see India get to the next level and can complement Foxconn’s world-class supply chain management and manufacturing efficiency.”

The statement follows Foxconn confirming on Monday that it had ended its partnership to make chips with Vedanta in a move that analysts said was a setback to India’s aggressive ambitious plan to become a semiconductor manufacturing hub.

The two companies announced the $19.5 billion joint venture last year, which was slated to set up a semiconductor and display plant in Gujarat, the home state of Prime Minister Narendra Modi. As part of the earlier agreement, Foxconn was supposed to bring technical expertise to the venture whereas Vedanta, which has a background in mining, would have financed the project.

Modi’s government has offered billions of dollars of incentives to companies in recent years as it races to turn India into an electronics manufacturing hub. The incentives have gained global attraction as U.S.-China geopolitical tension pushes many firms into cutting reliance with Beijing.

Indian ministers insisted on Monday that Foxconn dropping out of the joint venture with Vedanta was not a setback. “Both the companies Foxconn and Vedanta are committed to India’s semiconductor mission and Make in India program,” India’s IT Minister Ashwini Vaishnaw said.

Foxconn said the firm and Vedanta “mutually agreed” to part ways and that the move was “not a negative.” The firm, which clarified that it had not injected capital or fixed assets into the joint venture, declined to disclose more information citing “competitive and sensitive issues involved in negotiating large scale investments.”