New Delhi. Electronics giant Foxconn backed out of a $19.5 billion semiconductor joint venture with Indian mining conglomerate Vedanta Ltd. due to “external issues unrelated to the project.”

Hon Hai Technology, known internationally as Foxconn, and Vedanta Limited announced their joint venture to manufacture chips and display panels in India in February 2022. On Monday, Foxconn announced it mutually agreed to part ways with Vedanta Limited.

"This is not a negative. There was recognition from both sides that the project was not moving fast enough, there were challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project,” read a statement released Tuesday from the Taiwan-based company.

Vedanta said it has lined up other partners to set up India’s first semiconductor foundry to create the chips that are used in mobile phones, refrigerators and cars.

Prime Minister Narendra Modi’s government gave top priority to chipmaking as part of the country’s self-reliance policy by offering financial incentives of up to 50 percent of project costs under a $10 billion plan for semiconductor and display manufacturing projects as India vies to become a key player in the global supply chain.

India’s government leaders say they aren’t too worried about the impact.

Minister of Electronics and Information Technology Ashwini Vaishnaw said both companies are committed to India’s semiconductor mission, part of the country's Make in India program to foster domestic development.

Rajeev Chandrasekhar, junior minister for Electronics and Information Technology, said Tuesday that Foxconn’s decision will have no impact on India’s goals for semiconductor fabrication. "Both Foxconn and Vedanta have significant investments in India and are valued investors who are creating jobs and growth,” he said in a tweet.

Foxconn manufactures Apple iPhones in India and plans to expand production in the country, but it takes time to establish semiconductor operations, the company said.

“Foxconn first entered India in 2006 and we are still here. The group looks forward to growing alongside India’s nascent semiconductor industry,” it said in a statement Tuesday. The Taiwan-based company said it's working toward applying to the government’s Modified Programme for Semiconductors and Display Fab Ecosystem and looking for other partners and stakeholders both within India and abroad.