Vedanta-Foxconn talks with Karnataka on chip unit stuck over sops: Report

Vedanta-Foxconn is checking with other states such as Maharashtra, Gujarat, and Telangana to ascertain if they can find a better offer than Karnataka

The joint venture (JV) between Vedanta-Foxconn has shown interest in setting up a semiconductor manufacturing unit in Karnataka but the talks have hit a roadblock between top executives and the state government officials, a media report said on Wednesday.

According to the Economic Times report, while the JV is considering an investment of $20 billion, it is seeking 20 per cent of the investment value in the form of incentives and concessions. The expectation is based on back-of-the-envelope calculations on the indirect tax revenues that will accrue to the state over the long term after the unit becomes operational, they added.

While the Karnataka government has ensured to help in identifying a location to fast-track the project, talks have been stuck over the “quantum of sops the investors are asking for”, the ET reported.

Vedanta-Foxconn is also checking with other states such as Maharashtra, Gujarat and Telangana to ascertain if they can find a better offer than Karnataka, the report said.

On May 7, Karnataka Chief Minister Basavaraj Bommai said the state government will ensure that it becomes the top destination for foreign and national investors.

Bommai said the government is quietly working on various sectors which can attract investors in a big way. The sectors include IT, electronics, semiconductors, and electric vehicles.

''We will encourage investments in these sectors with our attractive offers,'' he said.