'Morsel snatched from Maharashtra's mouth': CM Shinde faces opposition heat as Vedanta picks Gujarat to set up chip joint venture

Former minister and Shiv Sena leader Subhash Desai said the Maha Vikas Aghadi government had worked hard to get the Foxconn-Vedanta project but the new government did not do the needful.

Published: 14th September 2022 02:22 AM  |   Last Updated: 14th September 2022 08:55 AM   |  A+A-

Maharashtra CM and Shiv Sena leader Eknath Shinde. (Photo | PTI)

Maharashtra CM and Shiv Sena leader Eknath Shinde. (Photo | PTI)

Express News Service

MUMBAI: Mining conglomerate Vedanta and Taiwanese electronics giant Foxconn’s move to set up a semiconductor plant in Gujarat has put Maharashtra’s Eknath Shinde government in a fix, with the Opposition tearing into it for losing the Rs 1.5 lakh crore project, which would have created one lakh jobs in the state. 

Former minister and Shiv Sena leader Subhash Desai said the Maha Vikas Aghadi government had worked hard to get the Foxconn-Vedanta project but the new government did not do the needful to seal the deal.

“We had even finalised the Talegaon location near Pune for the semiconductor plant. Only the final agreement with Foxconn Vedanta was awaited. But, then, we lost power. The Shinde-Fadnavis government did not do anything to retain this project,” Desai added.

Blaming the BJP, he said the move to relocate such a big project would not happen without the Centre’s interference. 

“We had several meetings in this regard, but were surprised why the project has been taken away from Maharashtra to Gujarat,” said Shiv Sena leader Aditya Thackeray.

NCP leader Jayant Patil alleged Shinde and deputy CM Devendra Fadnavis are busy with political rallies, while the BJP government in Gujarat is taking away big projects from Maharashtra.

Demanding a probe into the last-minute relocation of the project, MNS chief Raj Thackeray said big projects moving out of Maharashtra is not a good sign.

On Tuesday, the Vedanta and Foxconn signed a Memorandum of Understanding with the Gujarat government to set up a semiconductor assembling and testing unit on a 1,000-acre land in the state. According to the MoU, the 60:40 joint venture between Vedanta and Foxconn will set up a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit. 

The Nationalist Congress Party (NCP), the main opposition outfit, accused the neighbouring state, ruled by the Bharatiya Janata Party (BJP), of "snatching morsel from Maharashtra's mouth".

State NCP president and former minister Jayant Patil said with the big-ticket project "slipping" away from the hands of Maharashtra, the state has lost an investment potential of more than Rs one lakh crore.

Taking an aim at Maharashtra Chief Minister Eknath Shinde, whose government is being supported by the BJP, Shiv Sena leader Aaditya Thackeray said the Maha Vikas Aghadi (MVA), when it was in power, had "very strongly" pursued this project.

It was almost decided that the plant will come up in Maharashtra, said Aaditya Thackeray, who served as a cabinet minister in the erstwhile MVA government headed by the Shiv Sena.

"Our MVA government had brought this to final stage. The current dispensation has lost the confidence of potential investors, hence such mega projects are not coming here," he said.

Aaditya Thackeray said the mega project would have supported 160 ancillary industries and generated 70,000 to 1 lakh employment opportunities.

He said the previous MVA government was in touch with the company and a meeting had also taken place with its representatives in January this year.

"The new dispensation tweeted photos, claiming to have brought this (project) to Maharashtra but it seems intent or commitment was to send this away from Maharashtra," said Aaditya Thackeray.

Company officials also visited Marathwada and Vidarbha regions of Maharashtra and finally Talegaon (in Pune district) was identified as the possible site for the factory, he said.

Slamming the Shinde-led dispensation, which took office on June 30, the junior Thackeray said, "What was the government doing? What was the industries minister doing? On July 26, the CMO tweeted that the plant will come up in Maharashtra."

Vedanta, an oil-to-metals conglomerate, and Taiwanese electronics manufacturing giant Foxconn will make one of the largest-ever investments of Rs 1.54 lakh crore in setting up India's first semiconductor plant in Gujarat.

The 60:40 joint venture of Vedanta-Foxconn will set up a semiconductor fabrication plant, a display unit and a semiconductor assembling and testing facility on 1,000 acres of land in the Ahmedabad district.

"As Chief Minister and Deputy Chief Minister of Maharashtra do not get time from holding political meetings, Gujarat has once again taken away the morsel from Maharashtra's mouth. With the Gujarat elections coming up, the BJP in Maharashtra seems busy in safeguarding the interests of Gujarat," NCP leader Patil said in a series of tweets.

Will Chief Minister and Deputy Chief Minister (Devendra Fadnavis) apologise to the educated unemployed youth of the state for losing out on the project? he asked.

Patil, who was a senior minister in the Uddhav Thackeray-led government, said the Maha Vikas Aghadi (MVA), when in power, had pursued the investment.

A delegation of the company (JV) recently met Chief Minister and Deputy CM of Maharashtra.

Senior Shiv Sena leader and former industries minister Subhash Desai sought to blame the Centre for the project going to Gujarat.

"This is shocking. The Centre's word is important on such important investments. I am also raising a question about how many such industries will go from Maharashtra to other states, especially Gujarat?" Desai asked.

The Chief Minister's Office on July 26 had tweeted, "A delegation of Vedanta Group and Foxconn Company met Chief Minister Eknath Shinde at Mantralaya this morning. Deputy Chief Minister Devendra Fadnavis was present on this occasion."

"On this occasion, the Chief Minister said that Vedanta Company will be given full support for investment to promote semiconductor and display fabrication production in the state," the CMO had said.

Discussions about setting up Foxconn's semiconductor plant in Maharashtra were almost complete but something "sinister" took place which made the company shift the location to Gujarat, Congress leader and former state minister Balasaheb Thorat claimed.

"The Foxconn plant was expected to bring an investment of nearly Rs 1.58 lakh crore to Maharashtra. Ninety per cent of our discussions regarding the plant had been completed," said Thorat, who was the revenue minister in the MVA government.

"Something sinister took place which made the company shift its plant from Maharashtra to Gujarat. Nearly one lakh new employment opportunities would have been created with this plant," he added without elaborating on the "sinister" charge.

Thorat wanted to know what CM Shinde and deputy Chief Minister Fadnavis did to keep the project in Maharashtra.

Maharashtra Navnirman Sena (MNS) chief Raj Thackeray said it needs to be probed how the state lost out on the project.

"This plant was to come up at Talegaon near Pune. How did a project with the potential to generate large-scale employment slipped from Maharashtra's hands? This is a serious issue and this needs to be probed thoroughly. Maharashtra was the priority state for investors and investment going away from the state like this is not a good sign. This has to be considered by going beyond politics," Raj Thackeray tweeted.

The 60:40 joint venture of Vedanta-Foxconn will set up a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit on a 1000-acre land in the Ahmedabad district.

"The plant will start production in two years," Vedanta chairman Anil Agarwal told PTI after signing the Memorandum of Understanding (MoU) with the Gujarat government on Tuesday.

Semiconductor chips, or microchips, are essential pieces of many digital consumer products - from cars to mobile phones and ATM cards.

The Indian semiconductor market was valued at USD 27.2 billion in 2021 and is expected to grow at a healthy CAGR of nearly 19 per cent to reach $64 billion in 2026.

But none of these chips is manufactured in India so far.

A massive shortage in the semiconductor supply chain last year affected many industries, including electronics and automotive.

To cut dependence on imports from nations like Taiwan and China, the government brought a fiscal incentive scheme for manufacturing semiconductors in the country.

Vedanta-Foxconn is one of the successful applicants for the Production Linked Incentive (PLI) scheme for semiconductors.

"This is the largest ever investment in Gujarat. Ours will be the first semiconductor plant in the country," Agarwal said, adding local manufacturing of chips will make laptops and tablets affordable.

Agarwal said the Gujarat unit will manufacture 40,000 wafers (that's used in fabricating integrated circuits) and 60,000 panels per month to begin with.

Prime Minister Narendra Modi hailed the MoU as one that will boost the economy and create jobs.

"This MoU is an important step in accelerating India's semi-conductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact to boost the economy and jobs. This will also create a huge ecosystem for ancillary industries and help our MSMEs," he tweeted.

Besides Vedanta, a consortium comprising Dubai-based NextOrbit and Israeli tech firm Tower Semiconductor has signed a deal with the Karnataka government for a plant in Mysuru while Singapore-based IGSS Venture has chosen Tamil Nadu as the location for its unit.

Gujarat Science and Technology Department Secretary Vijay Nehra, who signed the MoU on behalf of the state government, said 8 per cent of all the chips used in the world are manufactured in Taiwan, followed by China and Japan.

"This upcoming facility will mark the beginning of chip manufacturing in India. This is also strategically important for India because it will reduce our dependence on other countries."

Out of the total investment, Rs 94,000 crore will go into setting up the display manufacturing unit while Rs 60,000 crore will be invested in the semiconductor manufacturing facility, the official said.

As per the MoUs signed by both parties, the Gujarat government will facilitate the investor in obtaining necessary permissions and clearances from the state departments concerned.

"The Gujarat government will also extend fiscal and non-fiscal incentives and benefits as outlined under the Gujarat Semiconductor Policy-2022.

Gujarat is the only state to have such a policy exclusively for the semiconductor industry," Nehra said.

Gujarat Chief Minister Bhupendra Rajnikant Patel assured his government will provide cooperation to the investing entity in setting up the facility and make it a success.

"We will provide all help to the joint venture so that the plant can start its operations soon. We are determined to make our country more self-sufficient in tech and curb our reliance on imports from other countries. We sincerely hope that the hub will be the beginning of a bright future and attract investment from other multinational companies down the line," he said.

In his address, Union Telecom and IT Minister Ashwini Vaishnaw said the Prime Minister has set a target of creating one crore job opportunities in the electronics manufacturing sector.

"When Prime Minister Modi launched Digital India (initiative) nearly seven years back, we used to wonder where this journey would take us in future, because the PM's thought process was completely different," he said.

The journey started with initiatives like Startup India and Make In India, said Vaishnaw.

Today, India has 70,000 startups, including 100 unicorns, said the minister, adding that India has become the second largest mobile phone manufacturer in the world.

He said Indian companies manufacture electronics goods worth Rs USD 80 billion, or nearly Rs 6,00,000 crore, every year.

"Under the PM's leadership, we created such an ecosystem which has created 25 lakh jobs in the electronics sector alone," he said.

"Now the PM has given a target of taking the number from 25 lakh to one crore. To do that, we are working on taking electronics production from the present USD 80 billion to USD 300 billion, which roughly comes to Rs 25,00,000 crore," Vaishnaw said.

Globally, countries such as the US are boosting domestic manufacturing capacity to cut reliance on imports.

A global semiconductor shortage and geopolitical tensions with China have bolstered Washington's drive to bring manufacturing back to American soil to regain leadership.

The US has earmarked billions of dollars and is reportedly looking at alliances with other nations.

Maharashtra site

According to a study by the Maharashtra Industrial Development Corporation, the state’s Talegaon location would have been a better choice as it has ample water supply, and better road, rail and air connectivity.

(With PTI Inputs)


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