Foxconn has pulled out of a $19.5bn (Rs1606.2tn) semiconductor joint venture with Indian conglomerate Vedanta, reported Reuters.

Last year, the Taiwanese electronics manufacturer signed a deal with Vedanta to build display and semiconductor manufacturing facilities in the Indian state of Gujarat.

“Foxconn has determined it will not move forward on the joint venture with Vedanta,” Foxconn was quoted by the news agency as saying.

The company said it had been collaborating with Vedanta for more than a year to “bring a great semiconductor idea to reality,” but they mutually agreed to discontinue the joint venture

Foxconn will have its name removed from a company that is now wholly controlled by Vedanta, it added.

In a statement, Vedanta reiterated its commitment to the project and said it had “lined up other partners to set up India’s first foundry”.

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According to a person with knowledge of the situation, delays in the Indian government’s incentive approval processes were a factor in Foxconn’s decision to abandon the project.

In addition, New Delhi has raised a number of concerns regarding the cost projections made to solicit government incentives, the source added.

Responding to the development, India’s Deputy IT Minister Rajeev Chandrasekhar said the Taiwanese company’s decision had “no impact” on India’s ambitions and that both businesses were “valued investors” there.

Last month, US chipmaker Micron Technology announced plans to set up a $2.75bn semiconductor assembly and testing facility in India.