Foxconn, the company known for manufacturing Apple iPhones, had last year announced a joint venture with Vedanta, an oil and metal corporation, to build a semiconductor plant in India.

Now, just weeks after the announcement, Foxconn has pulled out of the deal that is reportedly worth $19.5 billion. The company says that the deal was ended mutually, and it appears that Vedanta will move ahead with other partners.

In a statement, Foxconn said: “In order to explore more diverse development opportunities, according to a mutual agreement, Foxconn has determined it will not move forward on the joint venture with Vedanta.” It is now working towards removing its name from what is now a wholly-owned entity of Vedanta.

This is a blow to the Indian government, which has been trying to put efforts toward economic growth and government programs that are trying to promote manufacturing in the country.

Although several companies, including Apple, are working towards diversifying manufacturing outside of China because of political and economic uncertainties, India stands to benefit the most but hasn’t been able to make the most of this opportunity yet.

For those who are unaware, Foxconn and Vedanta last year signed a pact to set up semiconductor and display production plants in the state of Gujarat in India. As per the reports, chipmaker STMicroelectronics was being roped in as a technology partner for the venture, but talks were deadlocked.

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India’s efforts to become a major semiconductor manufacturer have just got a big boost with the announcement of the Taiwanese contract manufacturer Foxconn teaming up with Indian steel and oil company Vedanta in an effort to build a manufacturing plant for semiconductors in the country.

On Monday, Foxconn revealed that they have entered into a Joint-venture, with Vedanta holding the majority share of the equity. Foxconn further informed that Anil Agarwal, the founder, and chairman of Vedanta Resources Limited will also be the chairman of the joint venture company. The name of the joint venture company has not been made public yet, along with what kind of semiconductors the newly-formed company plans to manufacture.

Foxconn has mentioned that discussions are underway with various state governments regarding where the fab will be set up by the company. Nevertheless, the new venture is sure to create multiple jobs opportunities in the country.

The new joint venture between Vedanta and Foxconn is a result of the recently announced Performance Linked Incentive (PLI) scheme for electronics manufacturing by the Indian government. The scheme provides many benefits to foreign companies who choose to set up their manufacturing units in the country and also fulfills the government’s “Make in India” agenda.

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