Foxconn pullback

TAIWANESE electronics manufacturer Foxconn has withdrawn from a $19.5-billion semiconductor joint venture with Indian conglomerate Vedanta Ltd, barely 10 months after Prime Minister Narendra Modi had hailed the MoU — signed by the Gujarat government with the Vedanta-Foxconn Group — as ‘an important step accelerating India’s semiconductor manufacturing ambitions.’ Minister of State for Electronics & Technology Rajeev Chandrasekhar has stated that the Foxconn move would have no impact on India’s semiconductor fab goals, adding that both companies can now ‘pursue their strategies independently’ in the country and with ‘appropriate technology partners’ in semiconductors and electronics.

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The pullback is certainly not good news for the India Semiconductor Mission (ISM), which envisages building a vibrant semiconductor and display design ecosystem to enable India’s emergence as a global hub of electronics manufacturing and design. Even as the Union government has struck an optimistic note despite the reversal, the incompatibility that led to the Vedanta-Foxconn breakup needs to be scrutinised. Financial and technical issues that had a bearing on the outcome must be addressed so that a similar fiasco is averted in the future.

The Centre had told Parliament in March that four schemes with a total outlay of Rs 76,000 crore had been introduced under the ISM. The success of this mission — as also of the ‘Make in India’ initiative — hinges on providing an enabling environment for domestic and foreign companies to work in tandem. India’s efforts to reduce imports from China and become a bigger player in the global electronics value chain can bear fruit if the government goes all out to encourage and incentivise transfer of technology as well as to promote collaborative research and development in the semiconductor industry.