After more than a year of honeymoon, Foxconn announced on July 10 to "break up" with the Vedanta Group in India.Foxconn stated that it has withdrawn from the Semiconductor joint venture with Wenda Group worth $ 19.5 billion (about S $ 25.8 billion).

Entering India from high -profile, cooperating with Weidanta to establish a semiconductor company, to announce a breakup to high -profile, and withdraw from the semiconductor joint venture company. In just more than a year, Foxconn can also be called "god operation".It is inevitable.However, it is necessary to treat Foxconn's withdrawal from India, not to be interpreted rationally.

We noticed that Foxconn did not give reasons in the statement and did not give more explanations to Foxconn. It just mentioned that the cooperation between the two sides was committed to the common semiconductor concept in India.And think that this is a fruitful cooperation experience.Obviously, this is a polite word, which only represents Foxconn's mood at this moment, and does not represent the real feeling of withdrawing from India.

In a statement, Foxconn may better express the true thoughts of exiting India.The statement said: "Both parties realize that this project has not progressed fast enough." "We cannot successfully overcome the challenging gap and external problems that have nothing to do with the project."

Why does Foxconn evacuate India

This leaves a lot of imagination. Why is the project's progress fast enough? What is the reason?What is the gap between challenges, and why is there such a gap?In the event of "external problems that have nothing to do with the project", what is Foxconn mentioned here?What serious problems will allow Foxconn to choose to withdraw, rather than to eliminate differences and continue cooperation?This is the outside world hopes to know, but Foxconn has not expressed the problem in the breakup statement.

Although Foxconn did not explain the reasons and reasons for exit, the media found some specific examples through various previous reports and information.As for whether Foxconn withdraws from, it can only be seen.

From the perspective of the understanding of the collaborators, Foxconn may not be very thorough, comprehensive, and in -depth, or to predict the future development of the collaborators seriously and scientifically.Wenda India Branch revealed in the recent annual report that as of March 31 this year, net debt was 452.6 billion rupees (about S $ 7.3 billion). Due to dividend payment and capital expenditure, for more than a year, net debt, net debt for more than a year, net debt, net debt for more than a year, net debt, net debt for more than a year, net debt, net debt,More than doubled.To this end, Moody's international rating agency also reduced the rating of Wenda's parent company in London's headquarters Weidanta. For Foxconn, which has always been in the financial situation, this is obviously dissatisfied.Think of it.

The government's excessive intervention in enterprises may also be one of the reasons why Foxconn's withdrawal from India cannot be ignored.The specific manifestation is on the introduction of the semiconductor of the method. Although the joint venture has successfully introduced the Semiconductor and obtained a technical license, the Indian government also said that I hope that this European company will "participate in it" more, such as occupying shares in the partnership.Essence

In fact, the SEF semiconductor does not have much interest in this, but the Indian government seems to be dissatisfied. The joint venture has always asked the joint venture to do so, so that the joint venture to feel the pressure of the Indian government's too much intervention and worry about the future in production and operation.It will also be intervened and disturbed by the Indian government, which is also one of the reasons why Foxconn withdraws from India.

In the investment promotion work, the government's commitment should be spit and one nail. When it comes to, it must be fulfilled.Otherwise, government credit will be damaged.The Indian government announced in December 2021 that a chip industry incentive plan of about 10 billion US dollars aims to attract global chip manufacturers investment factories.The Indian government also publicly said that it will provide eligible enterprises with a financial support of up to 50%of the project cost.However, this project has been doing thunder and no rain, so that investors, including Foxconn, who want to get the Indian government, are becoming more and more disappointed.From another perspective, this is also a test of Indian business environment.

Foxconn withdraws, it is by no means a good thing for India.As one of the world's largest electronic manufacturers, Foxconn has a strong guiding effect whether it is building a factory in India or withdrawal, which will have a great impact on India's business environment.If Fuji Kang can stand firmly in India, it will have a great impact on India's attraction of foreign investment.Conversely, it will also have adverse effects.

It is worth noting that when analyzing the impact of Foxconn's withdrawal on India, it is necessary to be rational and objective.Exaggerate to a very serious point.The impact is objective, and the analysis cannot be too subjective.

India is one of the countries with the largest population in the world and is also a developing country. The future market demand is very large.As long as there is demand, you are not afraid of not investing.For India, the most important thing is the business environment.Only when the business environment is good can investors rest assured, and the role of the big market can fully play.Foxconn's withdrawal today does not mean that it will retire forever. As the Indian market continues to expand and the business environment continues to improve, no one can guarantee that Foxconn will not return to India to invest.For Foxconn's boss Guo Taiming, the interests are the first, others will give concessions to interests, and naturally will not give up the Indian market. The difference is that the current timing may not be mature.

The author is Chinese Financial Reviewer