Lead Apple supplier Foxconn withdraws from a $19.5 billion project in India

Foxconn Technology Co Ltd (TPE: 2354) says it is pulling out of a joint venture with Vedanta. Its shares ended roughly flat on Monday.

What does it mean for the ‘Make in India’ initiative

The $19.5 billion project was aimed at bringing semiconductor and display manufacturing to Gujrat – the ninth most populous state of India.

But the announcement today means a significant blow to the country’s ambition of becoming a global manufacturing powerhouse, as per Neil Shah (Vice President of Counterpoint).

This deal falling through is definitely a setback for the Make in India push, doesn’t reflect well on Vedanta and raises eyebrows and doubts for other companies.

The stock market news arrives a couple months after Foxconn reported a massive hit to its Q1 profit that came in alarmingly below Street estimates.

Vedanta responds to the Foxconn announcement

Note that Foxconn, nonetheless, will build production facilities in other states of India. The Gujrat factory in collaboration with Vedanta, though, would have been the largest of them all.

Still, the Indian multinational mining company is not giving up on its commitment to “Make in India”. Responding to the Foxconn announcement today, it said:

Vedanta has lined up other partners to set up India’ first foundry. Vedanta has redoubled its efforts to fulfil Prime Minister Modi’s vision.

Foxconn Technology Co Ltd is the largest supplier for Apple Inc (NASDAQ: AAPL) that, as per a recent report, plans on requiring an appointment to buy its recently unveiled Vision Pro mixed-reality headset.