Foxconn’s promised $5 billion investment in Maharashtra may not happen

Mumbai: Foxconn chairman Terry Gou, founder of the world’s largest contract electronics maker, promised $5 billion in investments and 50,000 jobs to Maharashtra in 2015.

After years of uncertainty and failed back-channel talks, that promise is unlikely to come true.

“Maharashtra must get over this Foxconn thing,”state industry minister Subhash Desai said on Thursday, virtually ruling out the Foxconn investment plan. It would not matter much even if the company decided to not set up its manufacturing unit in the state, he said, riled by persistent questions from reporters on Foxconn.

“How does it matter if Foxconn comes or does not come? Yes, I will, like you all, feel sad if they don’t invest, but it won’t make any difference to Maharashtra,” Desai told reporters at a briefing on the Magnetic Maharashtra Convergence 2018 Global Investment Summit to be held from 18-20 February in Mumbai. Maharashtra, he claimed, has received more than half of India’s total foreign direct investment (FDI) last year.

In October 2017, chief minister Devendra Fadnavis had told reporters that the state was still hopeful that the Foxconn proposal would materialize.

But things have not turned out as expected.

“All formal and back-channel talks with Foxconn over a period of two-and-a-half years had failed to make any significant headway,” said a senior state industry department official who did not want to be named. “It won’t be incorrect to say the proposal is practically off.”

“Apart from the usual issues like suitable land, land acquisition and labour laws, some outstanding issues like India’s standoff with China at Doklam and some security as well as environmental concerns expressed by us on their initial plan to set up a refurbishing unit here have also dogged this proposal,” the official said.

Foxconn representatives had not responded to Mint’s emailed queries till the time of going to press

Foxconn signed a memorandum of understanding with the government of Maharashtra in August 2015 to set up a giant mobile phone and phone parts manufacturing factory over 1,500 acres near Mumbai-Pune expressway. At that time, it was the single largest FDI proposal in western India. The proposal came within a fortnight of General Motors announcing an investment of Rs6,400 crore in the state. The carmaker has since quit India.

Fadnavis had visited a Foxconn factory in China in 2015 and engaged with top executives of the company to persuade them to invest in his state. He had touted it as one of the greatest successes of Prime Minister Narendra Modi’s Make in India programme. Foxconn manufactures phones for some of the top companies globally, including Apple Inc.

The Maharashtra plant was supposed to come up near Talegaon, along the Mumbai-Pune Expressway. Maharashtra Industrial Development Corporation (MIDC) was engaged in prolonged talks in 2016 over the modalities of an agreement for land purchase at MIDC’s Talegaon estate.

After the “big-bang” announcement, Foxconn became a “prestige proposal” for Maharashtra and personally so for Fadnavis, the official cited above said. “It was a sort of coup indeed to get a company like Foxconn to invest. It came early on in Fadnavis’s tenure and so it was a kind of a trophy. We have done everything we could to realize it but it has not worked.”livemint