Foxconn goes to Telangana: Did the Taiwanese giant snub Karnataka?

Foxconn, after denying reports of ‘binding, definitive agreements for new investments’ in India over the weekend, confirmed the setting up of a new manufacturing plant in Telangana’s Kongara Kalan. Before that, on March 3, Karnataka Chief Minister Basavaraj Bommai had taken to social media to share the news of Foxconn setting up its new plant in the state. Meanwhile, a day before CM Bommai’s announcement, the Telangana CMO, on March 2, had stated that Foxconn Chairman Young Liu signed an MoU to set up a plant in the state.

As both the states announced the possible investment by Foxconn, the company denied reports of new investments. The company said that its chairman had visited India but denied any definitive agreements, after news reports suggested an investment of $700 million by the company in Karnataka.

In a statement on Saturday, the Taiwanese tech giant said on Saturday, “Foxconn has not entered into binding, definitive agreements for new investments during this trip. Negotiations and internal review are ongoing. Financial investment sums discussed in the media are not information being released by Foxconn.”

While it is unclear why Foxconn snubbed Karnataka for this plant, reports from last week suggest that Foxconn Chairman Young Liu was left impressed by Telangana’s pace of progress. A report in The Hindu stated that Liu was impressed with the speed of work in the state. At the inauguration of T-Works, the hardware prototyping centre of the state government, Liu said that everything about Hyderabad – from the time he landed in the airport to all the arrangements – impressed him.

Citing sources, the report stated that the Foxconn delegation was shown two sites on the outskirts of Hyderabad for its manufacturing plant under consideration – Dundigul and Kongara Kalan. The latter was announced on Monday as the site for the manufacturing plant.

Meanwhile, Karnataka CM Bommai, who stated on social media that they signed an agreement with Foxconn that is expected to create 1 lakh jobs in the state, was left red-faced by the company’s denial. News agency IANS, quoting sources in the Large and Medium Industries Ministry in Karnataka, stated that they are “truly surprised with the development”. “The whole team of Foxconn, a major assembler of Apple iPhones, was in Bengaluru. The MoU was signed by the team and the team had also paid a visit to land near Bengaluru International Airport and expressed their interest,” the report quoted a source.

Meanwhile, Karnataka Congress chief DK Shivakumar on Sunday said that the BJP only knows to make tall claims. “BJP only knows to serve lies to our people & make tall claims with no authenticity. Recently, they boasted about an iPhone manufacturing unit coming up in Bengaluru with a potential of creating 1 lakh jobs, which has been proved false already. Karnataka won’t trust BJP again,” he said.

The Telangana Chief Minister’s Office issued a statement on Monday and also made Young Liu’s letter to Chief Minister K Chandrashekhar Rao public that confirmed the company’s commitment to set up the manufacturing plant in Kongara Kalan Park. The plant is expected to create over 1 lakh jobs.

The statement also said that Liu’s letter “amply clears the doubts as raised in a certain section of the press that the world-famous Foxconn Company was in a dilemma as to whether to set up the manufacturing facility in Telangana or not” — a clear reference to the will-they, won’t-they saga.

Liu also referred to their earlier discussions on March 2 – that was made public by the CMO a day before Karnataka CM Bommai – and also expressed gratitude for the hospitality extended to the delegation, according to the CMO.

The Foxconn Chairman said that their organisation studied extensively about the state of Telangana and praised the “friendly industrial development ecosystem” and the progress made by the industrial sector, especially in IT and related electronics sectors in a short span of eight and half years, as per the CMO statement. BusinessToday