Foxconn project stuck, minister says firm has stopped communicating

It has been over 26 months since the company first signed an agreement to invest USD 5 billion in the state in what was then touted as the largest FDI project in the country and the Devendra Fadnavis government’s major achievement.  (Express Photo by Ganesh Shirsekar)

Industries Minister Subhash Desai said Monday there had been no progress on the proposed investments from Taiwanese giant Foxconn. He said communication between the state and the company had been at a standstill.
“Geopolitical situations and the strained relationship between India and China may have affected prospects. The firm has stopped communicating with us about the project,” Desai said.

It has been over 26 months since the company first signed an agreement to invest USD 5 billion in the state in what was then touted as the largest FDI project in the country and the Devendra Fadnavis government’s major achievement.

The company has been for the last two years scouting for locations in Pune, Konkan as well as areas around Jawaharlal Nehru Port Trust for its plant, which will manufacture components for mobile phones. The state government through MIDC is to help in procurement of the land. However, there has not been much headway on identification of the potential location or site, which had fuelled speculation on whether the company would go ahead with its plans.

Foxconn has revenues of close to $134 billion and caters to leading companies as a contract electronics manufacturer. Chief Minister Devendra Fadnavis had earlier said the tension between India and China had caused a minor blip in the project. He had also stated that the company had raised some issues with the Centre, which were being addressed, and that he was hopeful of the company’s investment in India.

Desai, meanwhile, defended Maharashtra’s status as an investment destination and said the perception that the state was losing out on investments to other states was wrong. “Most of the statistics being shown to state that Maharashtra is losing out as an industrial destination are deduced through the Industrial Entrepreneurs Memorandum.

These are submitted in two stages once while signing of MoUs and other when production actually begins. The filling of these IEMs is voluntary. There have been various instances when companies after taking approvals of mega project offer letters have not filed IEM. So to deduce that these IEM filings give true picture of total investment is wrong,” he said.

As per the Department of Industrial Policy & Promotion, Desai claimed, Maharashtra had seen an investment of Rs 9122 cr till September 2017, which was the highest in the country.