Maharashtra frets over lost project, but Foxconn plans never got off the ground in the state

On August 8, 2015, the then BJP-Shiv Sena government headed by Devendra Fadnavis had first announced plans by Taiwanese electronics manufacturing giant Foxconn to invest in Maharashtra. This investment was to be of the scale of $2 billion, and an MoU was inked between the Fadnavis government and Foxconn Chairman Terry Gou for setting up a mobile production facility in Navi Mumbai, followed by a major plant at Talegaon.

The investment was later scaled up to $5 billion (Rs 35,000 crore), making it one of the biggest foreign direct investments in Maharashtra, with employment generation capacity of 50,000.

However, between then and 2019, when the Fadnavis government lost power, the project failed to make a head start, finding it difficult to meet Foxconn’s demands. These included more land at the Jawaharlal Nehru Port Trust, and matching of manufacturing costs with China.

On both these, the Union government’s intervention was necessary, but despite the BJP being in power at Centre too, the problems could not be solved.

Highly placed sources in the BJP said, “To facilitate a solution, Union Minister for Shipping Nitin Gadkari’s help was sought. He held a series of meetings with Foxconn officials.”

However, there was no success. “It was given to understand that around 4 acres of land was required at JNPT. Later, this rose to several hundred acres,” a source said.

In 2016, Maharashtra signed a separate agreement with Indian conglomerate Twinstar Display Technologies Vedanta Group Co. As per state Industry Department records, this followed a policy introduced by the state to promote investment by semiconductor equipment firms, which manufacture chips needed for electronic devices.

The deal remained on paper.

Ahead of the 2019 Lok Sabha and Assembly polls, the Foxconn project did not feature in the BJP poll manifesto or election campaign. Outgoing Industries Minister Subhash Desai went so far as to admit: “The Foxconn project was not heading anywhere.”

After Vedanta and Foxconn set up a joint venture and evinced interest to enter India again, the Maha Vikas Aghadi (MVA) government in power in Maharashtra by then resumed talks with them in February-March 2022. Subhash Desai, who was the Industries Ministry in this government too, said on Wednesday, “Maharashtra was the frontrunner for the Rs 1.5 lakh crore semiconductor and display fabrication plant. It was almost in the final stages. I wonder how Gujarat bagged the deal.”

As per the deal with Gujarat, the Vedanta-Foxconn joint venture will make the same investment for a similar unit in the state, and create one lakh job opportunities.

Fadnavis sought to pass the blame to the MVA government, suggesting that Foxconn decided to pull out over developments during the latter’s two-and-a-half year tenure. “We took a lot of initiatives to get Foxconn to Maharashtra. An MoU was signed, with the company promising an investment of $5 billion… But then the MVA was voted to power. They should have ensured it stayed in Maharashtra.”

CM Eknath Shinde said the MVA government had been unable to give a positive response to the company on incentives and facilities.

But while nobody in the ruling BJP-Shinde Sena expressed their unhappiness openly, given that the BJP is also in power in Gujarat, off the record they admitted that “a project of such magnitude could not have been moved without central leadership’s consent” – and that the timing, ahead of the Gujarat Assembly elections, could not be coincidental.

Shiv Sena MLA Aaditya Thackeray attacked the BJP-Shinde Sena government, claiming that after the Vedanta-Foxconn project, Maharashtra was set to lose a bulk drug project proposed at Raigad. NCP MP Supriya Sule regretted “the huge loss to economy and employment” for Maharashtra.

At the same time, the coalition too has a lot to answer for. Subhash Desai, who oversaw the signing of the Foxconn deal under the 2014-2019 Fadnavis government, said on January 6, 2020, when he was part of the MVA: “Foxconn’s investment commitment in Maharashtra is not happening. It will not happen in the future as well.” Multiple factors seem to have come in the way, Desai said, including Foxconn’s internal problems. He stressed that the state government was ready to accommodate all their concerns.

Four months later, in May 2020, Desai reopened talks with Foxconn during a Davos visit. While he exuded optimism, the designated company official hinted at a problem, saying: “We will just have to get a nod from the Centre.”

On Wednesday, Desai said: “There is no ambiguity that Maharashtra was the chosen destination of Foxconn from day one. Apart from Maharashtra, the other two contenders were Telengana and Karnataka… Where did Gujarat come into the picture?… Was it done as an afterthought to force Foxconn’s exit from Maharashtra?”

With heat building up, the new Industries Minister, Uday Samant, said Wednesday that Prime Minister Narendra Modi had assured CM Shinde that it would get a similar project as the Foxconn-Vedanta one to Maharashtra.

Adding that they would undertake a review as to what went wrong that the company took its project to Gujarat, he said: “We are committed to bringing industries to the state.”