India Trashes Chinese EV Maker BYD's Proposal To Set Up $1 Billion Plant

The Indian government rejects BYD's USD 1 billion manufacturing plant proposal in India due to security concerns, reported a media house. The Chinese automaker had intended to produce electric vehicles (EVs) and electric batteries in India in collaboration with an Indian EV company, Megha Engineering and Infrastructure.

Security concerns regarding Chinese investments in India were cited as the reason for the rejection during the discussions. Indian officials also pointed to existing guidelines that made such Chinese investments unfeasible, signaling the government's reluctance to involve Chinese players in critical sectors like telecom, automobiles, and cyberspace.

BYD had already established a substantial presence in the Indian automobile market, with plans to sell 15,000 units of EVs in 2023. However, New Delhi's stance on keeping Chinese investments at bay has cast doubt on BYD's expansion plans.

Meanwhile, Tesla's discussions with the Indian government for setting up a factory in the country have been positive, involving local manufacturing and potential exports.

In an effort to curtail investments from China, India implemented a policy in 2020 that imposed restrictions on Foreign Direct Investments from neighboring countries, including China. Approval from the government is now mandatory for investments from these nations. In May, the Indian government further tightened regulations to prevent Chinese companies from bypassing these rules through shell companies and availing subsidies typically denied to Chinese firms.