2023-07-11 19:48:11
The topic is explosive, not because the split between the electronics supplier Foxconn and its Indian partner Vedanta comes as a surprise. But because there are many indications of a bad environment in the divorce. This also hurts India’s government team because the $20 billion joint venture to build semiconductors wanted to settle in Gujarat, the home state of Prime Minister Narendra Modi. His government is pumping billions of dollars in taxpayers’ money into subsidies for technology companies. They should guarantee knowledge transfer, but also create millions of urgently needed jobs.
Foxconn dutifully explains in the separation statement that it has good contacts in the government. At the same time, the Taiwanese also say what everyone who knows India says – an investment there takes a lot of time. The short formula is: Those who came, were allowed to stay and were able to stay decades ago usually earn very good money today. But until then, most people have to suffer.
Still difficult terrain for companies
In surveys, German business people continue to criticize corruption in what is already the world’s fourth-largest economy and its rampant bureaucracy. They do not match the extremely high self-confidence that the Modi government is flaunting with a barrage of full-bodied announcements. The European Union has also had to learn that reality usually lags behind: it has been negotiating free trade with New Delhi for 17 years.
Christoph Hein, Sydney Published/Updated: , Recommendations: 29 Published/Updated: Recommendations: 27 Stephan Finsterbusch Published/Updated: , Recommendations: 4
India continues to be difficult territory for companies. Of course, no one can ignore the world’s most populous country and its purchasing power. The government has launched a subsidy program and initiated a series of reforms. Above all, however, India has become an indispensable partner of the industrialized countries in the struggle with China. Modi must seize this perhaps unique geopolitical opportunity by fundamentally improving the environment for investors instead of primarily subsidizing it. And with Southeast Asia, India has a rapidly growing competitor among investment locations. The Foxconn case shows that managers say sweethearts, but make sober decisions.
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