The news has been announced less than a year after the two companies announced the project, and it constitutes a significant blow to Prime Minister Narendra Modi’s ambitions to transform India into a tech manufacturing powerhouse.

"There was recognition from both sides that the project was not moving fast enough," Foxconn said in a statement. "There were challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project."

The company also criticised media reports that portrayed the decision as "a negative example of the Group's investment integrity" and stressed that "that is not the case". 

In response, Vedanta said it is fully committed to its semiconductor project and had “lined up other partners to set up...