The Facts
On Monday, Taiwanese company Foxconn, the world's largest electronics maker, announced that it has withdrawn from a $19.5B deal with Indian natural resources conglomerate Vedanta to set up semiconductor and display factories in the Indian state of Gujarat.
In a statement, Foxconn said the project, set into motion last year, was "not moving fast enough" and that it had been terminated by "mutual agreement." Vedanta will be assuming full control of the venture.
The Spin
Narrative A
Modi's vision of India competing with the world's powerhouses is growing fainter with each stalled project. Billions of dollars in chipmaking investments are stuck in limbo as companies remain hesitant to pull the trigger on developments, sometimes stemming from concerns over India's much-touted incentives in chipmaking. For the time being, India will remain a destination, not a source, of the world's semiconductors.
Narrative B
In spite of dire predictions, this setback doesn't affect India's chipmaking trajectory whatsoever, as Foxconn has already reapplied for government incentives to pursue semiconductor investments in the country. India's chipmaking industry will be a global leader in the near future as companies, including Foxconn, continue to court the Indian government in an effort to tap into this lucrative market.
