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Political Blame Game Begins As Gujarat Pips Maharashtra For Vedanta-Foxconn Semiconductor Plant

Earlier in July, Vedanta and Foxconn had met Maharashtra chief minister Eknath Shinde and deputy chief minister Devendra Fadnavis for investment in the proposed manufacturing facility

Vedanta and Foxconn on Tuesday signed memorandums of understanding (MoUs) with the Gujarat government to set up a semiconductor manufacturing facility with an investment of Rs 1.54-lakh crore. However, the development has led to a political blame game in Maharashtra as the companies were in talks with the state government to set up the semiconductor manufacturing facility there. 

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Earlier in July, Vedanta and Foxconn had met Maharashtra chief minister Eknath Shinde and deputy chief minister Devendra Fadnavis for investment in the proposed manufacturing facility. However, Gujarat, with better sops, got clinched the investment.

Vedanta had applied for the government’s Rs 76,000-crore production-linked incentive scheme for the development of semiconductors and display manufacturing ecosystem in India.

The MoUs were signed in the presence of Union Minister for Electronics and Information Technology, Ashwini Vaishnaw, Gujarat Chief Minister Bhupendra Patel, Vedanta Group Chairman Anil Agarwal, among other officials.

“History gets made! Happy to announce that the new Vedanta-Foxconn semiconductor plant will be set up in #Gujarat. Vedanta’s landmark investment of ₹1.54 lakh crores will help make India’s #Atmanirbhar Silicon Valley a reality," Vedanta Resources founder and chairman Anil Agarwal said in a series of tweets.

Both companies would invest Rs 1,54,000 crore to set up the facility in Gujarat, which would create one lakh job opportunities, Gujarat Chief Minister Bhupendra Patel said, adding, that his government will provide cooperation to set up the facility and make it a success.

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As incentives, Vedanta had sought 1,000 acres (405 hectares) of land free of cost on a 99-year lease, and water and power at concessionary and fixed prices for 20 years, according to a Reuters report.

Vedanta Group Chairman Anil Agarwal said the first phase of the project will see an investment of $10 billion over two-three years. He said among the sops being offered is a 25 per cent capital subsidy and power at subsidised tariff of Rs 3 per unit.

As part of the MoU, while Vedanta Displays will set up a display fab unit with an investment of Rs 94,500 crore, Vedanta Semiconductors will set up an integrated semiconductor fab unit and outsourced semiconductor assembly and test (OSAT) facility for Rs 60,000 crore, according to a Business Standard report.

In July, the Gujarat government announced a dedicated, subsidies-laden policy for semiconductor and display fab manufacturing. Apart from subsidies in power, land, and water tariff, the Gujarat Semiconductor Policy 2022-27 also featured the development of a Semicon City in the Dholera Special Investment Region (SIR), for a dedicated manufacturing hub of semiconductors and display fab sector, as per the news report.

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The proposed semiconductor manufacturing fab unit will operate on the 28 nanometre (nm) technology (tech) nodes with wafer size 300 millimetre; and the display manufacturing unit will produce Generation 8 displays catering to small, medium, and large applications.

Vedanta Semiconductors’ Managing Director Akarsh Hebbar said semiconductors of 28 nm and 12-inch wafer will be the key tech product. “Currently, 100 per cent of semiconductors are imported in India. With this unit, we will be able to achieve import substitution of at least 25-30 per cent,” he said.

Blame Game Begins In Maharashtra

A political blame game has erupted in Maharashtra after Vedanta and Foxconn on Tuesday signed an MoU with the Gujarat government to locate the project there.

The opposition in Maharashtra slammed the Eknath Shinde-led government for the state "losing" out on the Rs 1,54,000-crore mega semiconductor project. 

Meanwhile, Congress has alleged something "sinister" behind the change of location with the NCP saying the plant was "snatched" away.

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State NCP president and former minister Jayant Patil said the state has lost an investment potential of more than Rs 1 lakh crore. 

Shiv Sena leader Aaditya Thackeray said the previous Maha Vikas Aghadi (MVA) was in touch with the company. A meeting had also taken place with its representatives in January this year. 

It was almost decided that the plant will come up in Maharashtra, said Aaditya Thackeray, adding the current dispensation has lost the confidence of potential investors, hence such mega projects are not coming here."

"What was the industries minister doing? On July 26, the CMO tweeted that the plant will come up in Maharashtra," he said. Thackeray said the mega project would have supported 160 ancillary industries and generated 70,000 to 1 lakh employment opportunities. 

Nationalist Congress Party (NCP) leader Jayant Patil said, “The BJP seems to be more keen on guarding the interests of Gujarat given that there are elections there.”

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Maharashtra Congress leader Satyajeet Tambe urged the Dy. CM to look into the matter and bring the Vedanta-Foxconn semiconductor plant project back to Maharashtra. 

Tambe said Vedanta required 1,000 acre of land free-of-cost on a 99-year lease and water and power at concessionary and fixed prices for 20 years. The manufacturing unit was expected to bring in nearly 2 lakh jobs and Talegaon, Pune, was the preferred location due to its infrastructure and availability of skilled manpower.

“The Foxconn plant was expected to bring investment of nearly Rs 1.58 lakh crore to Maharashtra. Ninety per cent of our discussions regarding the plant had been completed," said Thorat, a revenue minister in the previous Uddhav Thackeray-led government.

“Something sinister took place which made the company shift its plant from Maharashtra to Gujarat. Nearly one lakh new employment opportunities would have been created with this plant," he added.

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