Work on semiconductor plant to start once govt approvals come in: Vedanta

Agarwal spoke to Moneycontrol’s Chandra Srikanth at Davos and discussed India’s macro opportunities, disinvestment and financing for the company’s semiconductor business plans.

Work on Vedanta’s proposed semiconductor plant in Gujarat is awaiting government approvals. In September 2022, the company signed a Memorandum of Understanding (MoU) with the state to set up a plant, in a joint venture with Taiwan-based Foxconn.

Agarwal spoke to Moneycontrol’s Chandra Srikanth at Davos and discussed India’s macro opportunities, disinvestment and financing for the company’s semiconductor business plans.

He says even though businesses and governments are ready to move out of China to India, land acquisition and bureaucracy are two big hurdles.

Edited excerpts:

You know, India is in full strength this time at the World Economic Forum at Davos. What's your own outlook for 2023? There are concerns we are in a precarious situation, globally. Can you tell us your outlook and your plans for Vedanta this year?

I'm with you. Most of the CEOs are at Davos. What the world is saying is that there is going to be a recession in 2023 because of the China factor and the Russia-Ukraine war, and we all have to tighten belts.

But, at the end of the tunnel, there is India, which everybody is seeing and liking. It's very important, because the demand is so high, the aspiration is so high. So, I have a feeling that this recession will not touch India. In fact, more jobs will be created.

A lot of infrastructure is going to be built in India, and whether it is electronics or natural resources, you'll see a lot of disinvestment in the public sector. This will increase our capacity, create more employment, and revenue-generation will happen.

One of your big ambitions for India is with respect to semiconductors. I think you had plans to build a semiconductor plant. Where are you on that? Also, in terms of securing financing for this, sir?

There is a queue of people. You know, there is $3 trillion, which has been earmarked in the world for infrastructure, for semiconductor because it is a difficult industry to come in. We are already in this business. So money will never be a constraint for this kind of a project. And we have signed up with the world’s best company. We have gone to Gujarat. We had an inauguration and signed all MoUs. As and when the government gives us the green signal, we'll go ahead.

When can we expect the groundbreaking for this to happen?

They are pushing and we are pushing. Whenever they are ready, and they complete the formalities, we will organise it.

In terms of commercial coal mine auction… that's also somewhere Vedanta participated. What can we expect, going forward?

One thing is very important. When we talk to the Secretary of Commerce in the US, he says we'll do everything in India. We will move China to India, but we have two problems.

One is land acquisition and the other is bureaucracy. That's what he says. One of the investors has said this. So, we have to find a way around land acquisition. Everybody wants to sell land. People are ready to pay double the price. There has to be some mechanism, under which you have the name, you send the money, and land comes to your fold, automatically. And the same thing with bureaucracy. So, I have no doubt that coal, what Coal India is producing, you will see that the private sector will be producing the equivalent of that.