Global manufacturing giant and key Apple supplier Foxconn has decided to pull out of a $19.5 billion joint venture with Indian conglomerate Vedanta, CNBC is reporting.
Foxconn said in a statement that it has mutually agreed with Vedanta to discontinue the joint venture. The project aimed to establish semiconductor and display manufacturing facilities in Gujarat, India.
This setback deals a significant blow to Indian Prime Minister Narendra Modi’s aspirations of transforming India into a leading global hub for high-tech manufacturing.
While Foxconn expressed confidence in India’s semiconductor ambitions, it did not provide further details regarding the decision. Vedanta has yet to respond to media inquiries.
As geopolitical tensions rise and economic pressures mount, American companies, including Apple, have been urging their suppliers to diversify their supply chains away from mainland China.
Foxconn has already initiated the construction of several factory sites throughout India. However, the now-canceled $20 billion joint venture with Vedanta was expected to be one of the largest initiatives.
This development occurs amidst a delicate and challenging dynamic between U.S. and Chinese leaders and businesses. They navigate a path that recognizes their interdependence while also sternly criticizing one another.
Major technology companies and the U.S. government have openly identified China’s technological advancements and manufacturing dominance as a significant national security threat.
Consequently, some American corporations, who have long fallen victim to state-permitted industrial espionage by China, are reevaluating their operations in China as part of risk mitigation efforts.
Despite this setback, Foxconn remains committed to its expansion plans in India. The company is currently constructing factories in Telangana and Bengaluru.
