Foxconn, a major supplier and global manufacturing powerhouse for Apple, has withdrawn from a joint venture project worth $19.5 billion with Indian conglomerate Vedanta. This project aimed to establish semiconductor and display manufacturing facilities in the Indian state of Gujarat. The decision by Foxconn is a setback for Indian Prime Minister Narendra Modi’s vision of turning the country into a high-tech manufacturing hub.
According to Foxconn, the withdrawal from the joint venture with Vedanta was a mutual agreement. However, the company expressed confidence in India’s semiconductor ambitions despite this development. Vedanta has not provided any comment on the matter.
The push for diversification of supply chains beyond mainland China has been driven by American companies, including Apple, amidst increasing geopolitical and economic tensions. Foxconn has already initiated the construction of several factory sites in India, although the joint venture with Vedanta would have been one of the largest endeavors, valued at $20 billion.
The dissolution of this partnership comes at a time when U.S. and Chinese leaders, as well as business executives, are treading a delicate path of navigating their interdependence while simultaneously expressing criticism toward one another. The U.S. government and major technology firms have started openly recognizing Chinese technological advancements and manufacturing dominance as a significant threat to national security. In response, some U.S. corporations, having been targets of Chinese state-sanctioned industrial espionage in the past, are reevaluating their operations in China as part of efforts to mitigate risks.
Despite the setback with Vedanta, Foxconn continues its expansion in India and has ongoing projects in Telangana and Bengaluru, where it is building additional factories.
In summary, Foxconn’s decision to withdraw from the $19.5 billion joint venture project with Vedanta deals a blow to India’s ambitions of becoming a global high-tech manufacturing powerhouse. This move highlights the challenges faced by countries and companies as they navigate the complexities of global trade relationships and seek to reduce dependence on specific regions for manufacturing and supply chain operations.