Vedanta-Foxconn signed an MoU with the Gujarat government on Tuesday to set up a semiconductor fabrication unit, a display fabrication unit, and a semiconductor assembling and testing unit in Ahmedabad district.
Vedanta Group chairman Anil Agarwal said the investment will be funded through internal accruals and the company will not raise any fresh funds. “India will now be the fourth country to soon start manufacturing semiconductors. We hope to finalise the land over the next fortnight and perform the ground-breaking ceremony within the next three months, and the project is expected to operationalise over the next two years. We expect to break even in the next five years,” Agarwal told reporters. Vedanta will hold 60% of the equity in the JV and Foxconn will own 40%.
In the initial phase, the JV will invest $10 billion (approximately Rs 79,584 crore) over the next three years. Vijay Nehra, secretary, Department of Science and Technology (DST), government of Gujarat, said the MoU is a big development for not only Gujarat but India too. “Gujarat became the first state to come out with a dedicated semiconductor policy, which helped create a transparent system as far as incentives are concerned,” Nehra said.
“Gujarat also became the only state to put in place a dedicated implementation framework in the form of the Gujarat State Electronics Mission (GSEM) which was one of the factors that helped Gujarat get the project,” Nehra added.
The company has been given 25% capital subsidy in addition to a Rs-3-per-unit subsidised power tariff for a period of 20 years, among other subsidies. This is the first big-ticket investment, aimed at creating one lakh jobs, after the state government announced its “Semiconductor Policy 2022-27”.
Top government officials said that Gujarat continued to woo Vedanta-Foxconn even after the Maha Vikas Aghadi (MVA) government had announced the project would be set up in Maharashtra. “Gujarat once again approached the company offering full support under the semiconductor policy. Officials met CM Bhupendra Patel in Gandhinagar where the state offered all support, assuring that a dedicated team led by IAS officers would give support at all levels for faster implementation of the project. This clinched the deal for Gujarat over Maharashtra or any other state in the race,” top officials close to the development said.