Billionaire Anil Agarwal wants to build a chip plant in India with Apple supplier Foxconn, but hurdles are mounting
- A venture between Anil Agarwal’s Vedanta Resources and Taiwan’s Foxconn, announced last year, has yet to obtained enough financial backing
- Prime Minister Narendra Modi has launched a US$10 billion drive to jump start local chip production to reduce dependence on Taiwan and mainland China
Billionaire Anil Agarwal’s plan to build a US$19 billion chip-making plant in India is floundering as his venture struggles to secure a technology partner and faces challenges in obtaining financial incentives from the government.
Winning government funding is key to fulfilling Agarwal’s chip dream, given his broader empire is facing intensifying financial strain. The billionaire, struggling to shake off the weight of a massive debt pile in his commodities business, is considering divesting a less than 5 pr cent stake in Mumbai-listed Vedanta in a last-ditch effort to reduce borrowings, Bloomberg News reported last month.
Vedanta, in an emailed response to questions, said it is committed to the plant and has “identified a strong technology partner to make this project a huge success”. It did not name the partner or say whether an agreement has been reached.
Hon Hai did not respond to requests for comment. GlobalFoundries, STMicro and India’s technology ministry also did not immediately respond to queries.
While it is working on securing a partner, the venture has submitted a capital expenditure estimate of US$10 billion to the Indian government, the people said. The government considers that figure inflated and estimates US$5 billion is closer to the true cost, they said. If all the requirements for incentives are met, the government could pay up to a half of a project’s cost. Vedanta said its expense estimate is at par with other similar projects.
Tower did not immediately respond to a request for comment.