Foxconn Technology's silence on the proposed $5 billion investment in Maharashtra is worrying the state government, as the Taiwanese electronics contract manufacturer hasn't yet sent a proposal to acquire 300 hectares of land to set up a factory.
In August last year, Foxconn had said that it would invest $5 billion (roughly Rs 32,000 crore) in Maharashtra in the next five years after the state government agreed to allot it 300 acre of land to set up a plant. The company had also signed a memorandum of understanding (MoU) with the Maharashtra government in this regard.
"We haven't got a formal proposal for the land till now," a state industries official told the Business Standard.
The development was also confirmed by the state Industries Minister Subhash Desai.
Meanwhile, a section of the state government is becoming "restless" over the issue, as the state is yet to see the investment by Foxcoon, despite many visits by the company's senior officials to Maharashtra.
Foxconn's officials have held long meetings with the government authorities and also visited some sites to assess the suitability to set up the proposed plant.
The state-run Maharashtra Industrial Development Corporation (MIDC) already has in its possession 300 hectares of land at Talegaon-Chakan in Pune district for Foxconn's proposed plant, the state industries department official, who is associated with the project, told the daily.
"Once the company submits the land proposal, the allotment process will be done after completing the necessary scrutiny," the official added.
Last year, the Maharashtra government led by chief minister Devendra Fadnavis had announced a range of incentives for Foxconn to set up a manufacturing plant. Foxconn will get 100% exemption in paying stamp duty during the investment period and would be exempted from paying local taxes such as property tax, land tax and entry tax.
Additionally, the government will offer a subsidy on its total fixed capital investment, without a bar on the amount. Foxconn will also be eligible for 20% subsidy from the state government in addition to central government subsidies.
However, acquiring Japanese electronics major Sharp for $ 5.3 billion may be more important for Foxconn than setting up facilities in Maharashtra, despite India being an attractive market for electronic products.
Alberto Moel, senior research analyst, Asian IT hardware for Bernstein Research, believes that the multi-billion dollar investment could never become a reality. "I don't know the amounts involved, but I would be very surprised if it was more than a few hundred million dollars. My take that's probably the extent of the "$5 billion" you'll be seeing for a while," Moel said on Foxconn's proposed investments in India.