Government is reportedly set to decline Foxconn and Vedanta’s joint venture request to receive incentives for manufacturing semiconductor chips in India.
According to Bloomberg report, authorities are likely to inform the joint venture that it won’t receive incentives for building 28-nanometre chips. The venture has not been able to meet government requirements to receive funding as the project still lacks a technology partner and a manufacturing grade technology licence for construction of 28 nanometre chips.
The rejection will come as a setback for Anil Agarwal-led Vedanta’s chipmaking ambitions.
Last year, Vedanta and Foxconn had announced a Rs 1,54,000 lakh crore investment in Gujarat to set up a manufacturing unit in the state.
Both the companies had formed a joint venture, Vedanta Foxconn Semiconductors Ltd (VFSL), which is led by Vedanta Chairman Anil Agarwal. Vedanta is the majority shareholder in the venture, with a 63 per cent stake, whereas Foxconn holds a 37 per cent minority stake in the joint venture.
Indian government has been trying to promote manufacturing in the semiconductor sector under which the$10 billion India Semiconductor mission was launched in December 2021. Under the programme, India government aims to provide subsidy to selected chip manufacturers.
Apart from the chipmaking venture, Foxconn has also invested in manufacturing Apple products in India. Recently, the Taiwan based firm announced a $500 million investment in Telangana. This comes as the firm looks to diversify production line away from China amid concerns over the country’s trade conflict with the United States.