Mumbai

$5 billion Foxconn plant deal scrapped: Industries Minister

Closed chapter: Foxconn signed a pact to invest $5 billion over five years on an electronics manufacturing facility.

Closed chapter: Foxconn signed a pact to invest $5 billion over five years on an electronics manufacturing facility.   | Photo Credit: PICHI CHUANG

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State govt. inked MoU in 2015 to build facility at SEZ in JNPT

Maharashtra Industries Minister Subhash Desai announced on Monday that the deal with Foxconn Technology Group to build an electronics manufacturing plant has been cancelled.

Mr. Desai said Foxconn, the world’s largest contract manufacturer of consumer electronics, has decided not to go ahead with its commitment to invest around $5 billion (over ₹35,000 crore) in the State as proposed in an MoU signed with the government in 2015. He said the deal would not be carried out owing to Foxconn’s internal dispute with Apple Inc. “The investment commitment made by Foxconn is not coming through. It will not happen in the future as well. While they had taken up land near Navi Mumbai to set up initial facilities, it seems like multiple factors have led to their exit from Maharashtra,” he said.

Mr. Desai said the MoU with Foxconn did not have any loopholes and the State government had made all possible efforts to make sure the deal would be implemented. He said, “Prevailing global economic conditions, better performance by its competitors and internal disagreements with Apple, ensured the company could not get a head start.” Mr. Desai added, “We left no stone unturned to ensure that this MoU came through. But it was all in vain.”

The deal was inked by the previous government led by the Bharatiya Janata Party and the Shiv Sena to set up an electronics manufacturing plant on a 13-acre plot in the special economic zone (SEZ) at Jawaharlal Nehru Port Trust (JNPT).

Joint approval

Earlier, the Taiwan-based manufacturer had forwarded the proposal to Union Minister Nitin Gadkari, who spoke to the then chief minister Devendra Fadnavis about the land requirement and approved the move.

The deal was finalised after the company’s proposed plant to manufacture mobiles at a land in Turbhe in Navi Mumbai got stuck due to encumbrance issues. The Maharashtra Industrial Development Corporation said the plot was to be sublet from a major developer, but the company had already set up its corporate offices in south Mumbai.

The State was able to lease only two sheds at the land, while the rest remained encumbered. The total area was over 2 lakh square feet, but the company needed more land. The firm even looked for large tracts of land in Vidarbha and Marathwada regions.

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Printable version | Jan 25, 2020 8:02:53 AM | https://www.thehindu.com/news/cities/mumbai/5-billion-foxconn-plant-deal-scrapped-industries-minister/article30498410.ece

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