The Narendra Modi government has trashed Chinese automaker BYD’s proposal to set up a $1 billion manufacturing plant in India, reported Economic Times on Saturday.
The Chinese EV giant had earlier submitted a proposal to build EVs as well as electric batteries in India in partnership with an Indian EV company Megha Engineering and Infrastructure Ltd.
The Chinese plan to manufacture EVs and batteries in India encountered “security concerns”, the report said. The company had initially planned to manufacture 15,000 electric cars in India annually.
“Security concerns with respect to Chinese investments in India were flagged during the deliberations,” an Indian official was quoted as saying by the Economic Times. Another official cited ‘existing guidelines’ to claim that such Chinese investments were not possible.
BYD’s presence in India
Times Now reports BYD already has a significant presence in the Indian automobile market. In 2023, it aims to sell at least 15,000 units of EVs. Furthermore, it also revealed its plans to expand its distribution network in India and upgrade manufacturing capacity.
However, those plans seemingly stand dashed now as New Delhi seems adamant about keeping Chinese players away from India’s major sectors, including telecom, automobile and cyberspace.
The report says BYD currently has a manufacturing facility operational in India’s southern state of Tamil Nadu, with a production capacity of 10,000 units per year.
India rolls out the red carpet for Tesla
The move comes amid ongoing discussions between the Indian government and US billionaire Elon Musk-owned Tesla for setting up a factory in the world’s most populous country.
Watch: Tesla’s pricing strategy backfires?
“Tesla has come to us with an ambitious plan, and we are confident that the movement will be positive this time around, especially as it involves both local manufacturing and exports,” a Times of India report quoted an Indian official as saying.
India’s measures to stymie investments from China
India brought a policy in 2020 post Chinese hostilities in the Himalayas which effectively put restrictions on Foreign Direct Investments originating from China.
India mandated prior approval for investments from nations that share land borders with India, a policy touted as anti-China by experts.
In May this year, the Indian government introduced plans to crack down on Chinese companies seeking to bypass this rule using shell companies and availing subsidies that are generally denied to Chinese companies.