In a major loss for the state of Maharashtra, the world’s largest contract manufacturer of consumer electronics, will not be setting up its unit in the state. Foxconn had signed a Memorandum of Understanding with the erstwhile Devendra Fadnavis government in 2015, for a proposed $5 billion investment in the state to set up a plant to make mobile phones and components and help create 50,000 jobs by 2020. Maharashtra Industries Minister Subash Desai announced that the company has developed cold feet and no longer will be setting up its scheduled plant in the state. He attempted to defend the incompetence of the Maha Vikas Aghadi as he blamed the company’s pulling out to its internal dispute with Apple. Foxconn has unequivocally denied any internal dispute behind the decision to pull out of Maharashtra.
Desai said the Taiwanese electronics giant is facing market-related issues and also competition from smartphone-assembling firms in India.“Foxconn’s commitment of investing in the state will not work. It doesn’t serve directly industries department said that land was also identified in the special economic zone of Jawaharlal Nehru Port Trust, but things did not work out”, they said. Desai said that “the state had learnt its lesson and will now think twice before believing industries in their claims on investments”. Desai claimed that Foxconn is having some internal issues with Apple and hence won’t be going ahead with the ambitious project.
Foxconn has categorically denied any “internal dispute” with Apple Inc.
In a statement, Hon Hai, known as Foxconn in the global market, said the report indicating that the company and its major clients were locked in an “internal dispute” was not true. Currently, Hon Hai said, the group is working well with its major client in India, adding that the cooperation continues, so the group’s production in India is proceeding smoothly. In line with Prime Minister Narendra Modi’s Make in India initiative, Foxconn has embarked on a project to establish 10-12 facilities in India by 2020 as part of the company’s efforts to extend its global reach in electronics manufacturing, while seeking partners to invest in a wide range of businesses such as e-commerce, mobile Internet services and renewable energy.
The company’s decision to categorically deny any internal dispute shows that the company is shunning Maha govt specifically for now – the first achievement of the Maha ‘Vikas’ Aghadi government. It is a commonplace that a change in government often makes the investors develop cold feet especially if it’s an unstable government. The Uddhav Thackeray government is not only an unstable government with an albatross hanging around its neck but also sympathetic to the NGOs and the obstructionists who often gang up and deny India’s right to development which was seen in the case of Sterlite Copper Plant. The Uddhav government has indicated that it will drop cases against activists involved in protests against nano refiner – one of the biggest Foreign Direct Investment the nation has ever seen. Add to the fact that, the state government has also placed the Bullet train project under review which is jointly being developed by India and Japan and the less said about the state government’s stance on Aarey Metro, the better. It seems that all these decisions acted as multipliers and played a pivotal role as Foxconn decided to withdraw from the MoU as the Thackeray government is increasingly being viewed as the government which is anti-development and unfriendly to industrialists.
Whatever reasons this govt may give, it’s not natural that this celebrated FDI is cancelled soon after Maha Vikas Aghadi sets up base. It seems that the only ‘Vikas’ that the Maharashtra government cares about is the Vikas of the apex families i.e the Thackerays, Pawars and the Gandhis.