Lead Apple supplier and global manufacturing powerhouse Foxconn has pulled out of a $19.5 billion joint venture project with Indian conglomerate Vedanta that would have brought semiconductor and display manufacturing to the Indian state of Gujarat.
"Foxconn has determined it will not move forward on the joint venture with Vedanta," the Taiwanese company told CNBC. The move is a significant blow to Indian Prime Minister Narendra Modi's ambitions to transform the country into a global, high-tech manufacturing powerhouse.
Foxconn said the decision was by "mutual agreement," but that it remained "confident" about India's semiconductor ambitions. Vedanta did not respond to a request for comment.
American companies, Apple among them, have pushed their suppliers to diversify their supply chains beyond mainland China, as geopolitical and economic tensions mount. Foxconn has broken ground on multiple factory sites across India, although the $20 billion joint venture with Vedanta would have been one of the largest.
The breakup comes as U.S. and Chinese leaders and business executives work through an uneasy and oftentimes treacherous path, with both threading the needle between acknowledging their codependence and harshly rebuking their counterparts.
The U.S. government and major technology firms have started to openly identify Chinese technological advancements and manufacturing dominance as a key threat to national security. Some U.S. corporations, long the victim of Chinese state-permitted industrial espionage, are reassessing Chinese operations as part of so-called "de-risking" efforts.
Foxconn continues to build other factories across India, including one in Telangana and one in Bengaluru.
