Setback for Vedanta-Foxconn chip venture as government poised to deny crucial funding: Report

The Indian government is expected to withhold crucial funding for Anil Agarwal's chip venture, dealing a blow to the billionaire's aspirations of establishing India's version of Silicon Valley, according to a recent Bloomberg report. Sources familiar with the matter revealed that the authorities are likely to inform the joint venture between Vedanta and Taiwan's Foxconn that it will not receive incentives for the production of 28-nanometer chips. 

The venture's application for government assistance, seeking billions in funding, has reportedly failed to meet the government's specified criteria. Additionally, the project is still in need of a technology partner and a manufacturing-grade technology license to proceed with the construction of 28nm chips.

This setback comes at a challenging time for Agarwal's metals and mining conglomerate, which is already grappling with the task of reducing its substantial debt burden.

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In September of the previous year, Vedanta and Foxconn, also known as Hon Hai Precision Industry Co Ltd, made headlines with their announcement of a $19.5 billion investment in the establishment of semiconductor and display production plants in the state of Gujarat. This ambitious project was expected to create over 1,00,000 job opportunities and was hailed by Agarwal as a significant step towards India's own Silicon Valley. "India's own Silicon Valley is a step closer now," Agarwal had said last year after the announcement.

The chip venture's future now hinges on finding a suitable technology partner and securing the necessary manufacturing-grade technology license.

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