Mumbai: The Vedanta-Foxconn joint venture Tuesday signed an agreement with Gujarat to set up a Rs 1.5 lakh crore semiconductor and display fabrication plant, a blow to Maharashtra which had been in advanced stages of negotiations for the investment.
The development has sparked a blame game between leaders of Maharashtra’s previous Maha Vikas Aghadi (MVA) government and the current Shiv Sena-Bharatiya Janata Party (BJP) dispensation.
Prime Minister Narendra Modi, whose home state is Gujarat, tweeted Tuesday that the Memorandum of Understanding (MoU) is “an important step in accelerating India’s semiconductor manufacturing ambitions”.
This MoU is an important step accelerating India’s semi-conductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact to boost economy and jobs. This will also create a huge ecosystem for ancillary industries and help our MSMEs. https://t.co/nrRbfKoetd
— Narendra Modi (@narendramodi) September 13, 2022
Foxconn is the trade name for Taiwan-based Hon Hai Precision Industry Co Ltd, a contract electronics manufacturer.
The signing comes less than two months after Chief Minister Eknath Shinde and his deputy Devendra Fadnavis met executives of the Anil Agarwal-led Vedanta Group and expressed optimism about the joint venture investing in Talegaon near Pune, and months ahead of Gujarat assembly elections, slated to happen later this year.
Maharashtra had been lobbying for the investment since 2015.
In a press conference Tuesday, Shiv Sena leader Aaditya Thackeray said it was a “big loss” for the state as the previous MVA government — which comprised the Shiv Sena, Nationalist Congress Party (NCP), and the Congress — had “95 per cent finalised the investment in Maharashtra”.
“It was 95 per cent finalised that this company will come to Maharashtra, but despite everything being finalised, why did this business go to another state? The establishment should answer why it went to Gujarat,” he added.
Speaking to ThePrint, Fadnavis said that the companies had decided to go ahead with investing in Gujarat even before the Shinde-led government came to power, and that the blame lies with the earlier government.
“Although I’m a little disappointed, I’m not discouraged,” he further said, adding: “We’ll take Maharashtra much ahead of other states in the next two years”.
Maharashtra’s interest in the project
The Maharashtra government was in talks with Vedanta and Foxconn individually before the companies signed a joint venture as early as 2015 — when Fadnavis was chief minister of the state.
Fadnavis met Foxconn executives during his China visit in May 2015 and later hosted them in Maharashtra. The same year, Foxconn signed a pact with the state government pledging to invest $5 billion over five years to set up a new electronics manufacturing facility.
The company planned to start a small mobile production facility in Navi Mumbai before a major plant at Talegaon, and even took up office space at the World Trade Centre in Mumbai’s Cuffe Parade, state government sources told ThePrint.
In 2016, the Maharashtra Industrial Development Corporation (MIDC) also signed an agreement with Twinstar Display Technologies — a Vedanta Group company — and unveiled a ‘fab policy’ for fabrication companies to encourage investment by semiconductor and semiconductor equipment firms, which manufacture the chips needed for electronic devices.
In February this year, the Vedanta Group and Foxconn entered into a joint venture to manufacture semiconductors in India.
While Aaditya Thackeray said that by March-April this year, Maharashtra had emerged as the frontrunner for the Vedanta-Foxconn joint venture to invest in, Fadnavis told ThePrint that the deal with the Gujarat government was being shaped for two years.
The blame game
Subhash Desai, a senior leader from the Uddhav Thackeray-led Shiv Sena who was the MVA government’s industries minister, told reporters that he had several meetings with the executives of the company regarding their expectations from the Maharashtra government.
“After all this, they selected a site in Talegaon. All these discussions were positive and the status was that only paperwork really remained. Then our government fell and we couldn’t take any more efforts to materialise the investment,” he told reporters at the press conference that he jointly addressed with Aaditya.
Desai said that Vedanta-Foxconn’s MoU with the Gujarat government was especially “unexpected” after seeing photos of Shinde and Fadnavis meeting Vedanta’s executives in July.
‘Previous government to blame’
Speaking to ThePrint, Fadnavis, contradicting Aaditya’s claims, said that the former government didn’t invite Vedanta-Foxconn executives for discussions even once despite the company being in talks with Gujarat for two years.
“Our government came [back to power] just a few days ago. We were told that Gujarat has given a good deal to Foxconn Vedanta and they have decided to invest there. We immediately contacted them and offered a better package,” said Fadnavis, who was sworn in as deputy chief minister on 30 June.
The BJP leader further said that his government had had negotiations with Vedanta-Foxconn but “finally, they decided to stick to their original decision to go to Gujarat”.
“If at all we intend to start a blame game, then it is the previous government that is to blame…not even once did our erstwhile government invite them,” he said. “We tried our best, but we were late.”
(Edited by Uttara Ramaswamy)
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