India Set To Deny Funding For Vedanta-Foxconn Chip Venture

The Indian government is apparently on the verge of withholding critical funding for Anil Agarwal's chip company, which might be a blow for the billionaire's aim of developing India's very own Silicon Valley.

According to Bloomberg News, individuals familiar with the situation have suggested that the authorities are anticipated to tell the joint venture between Vedanta (VDAN.NS) and Taiwan's Foxconn (2317.TW) that it would not get incentives for the development of 28-nanometer chips.

The venture's application for billions in government assistance, as stated in the report, falls short of the government's criteria. Furthermore, the project is currently in search of a technical partner as well as a manufacturing-grade technology licence to support the fabrication of 28nm chips.

The report also mentioned that Foxconn chose not to provide a comment, and there was no immediate response from India's technology ministry and Vedanta to Reuters' requests for comment.

The setback comes as Agarwal's metals and mining company is already struggling to reduce its massive debt load.

Last September, Vedanta and Foxconn - previously known as Hon Hai Precision Industry Co Ltd - announced a $19.5 billion investment in semiconductor and display manufacturing units in Gujarat, creating more than 100,000 employment.

"India's own Silicon Valley is a step closer now," Agarwal had said last year after the announcement.