• Tue. Feb 27th, 2024

India rejects Chinese carmaker’s $1 billion bid to set up EV factory: Report

India rejects Chinese carmaker’s  billion bid to set up EV factory: Report

The latest rejection comes as a blow to BYD’s ambitious plans for India.

India has rejected Chinese carmaker BYD Co.’s proposal to build a $1 billion electric-vehicle plant in partnership with a local company.

The government rejected the project from BYD and Hyderabad-based Megha Engineering and Infrastructures Ltd over national security concerns, the people said, asking not to be identified as the decision has not yet been made public. One of the people said the use of Chinese homegrown technology was worrisome.

Foreign direct investment in India’s automobile sector usually does not require approval. Investment proposals from countries bordering India require political and security clearance from the Ministries of External Affairs and Home Affairs.

BYD declined to comment. Representatives of Megha, which was founded in 1989 and has infrastructure projects in sectors ranging from power to transportation, did not return phone calls or emails seeking comment.

Spokespeople for the Ministry of Finance, Ministry of Heavy Industry and Ministry of Home Affairs, which are evaluating BYD’s proposal and vet investment coming into the country, did not respond to requests for comment.

New regulations

India is imposing restrictions on Chinese investment following several deadly clashes along the disputed border between the two countries. Great Wall Motor Co. failed in its bid to purchase the Mothbold General Motors Co. plant after it was denied permission to close the deal.

MG Motor India Pvt Ltd, the local unit of SAIC Motor Corp, was being investigated by the government for alleged financial irregularities, Bloomberg News reported last year. MG Motor has announced plans to divest its 100% stake and aims to be majority owned by an Indian firm within two to four years.

The latest rejection comes as a blow to BYD’s ambitious plans for India. The company, which entered the country in 2007, aims to capture 40% of the domestic EV market by 2030, Sanjay Gopalakrishnan, its senior vice president of regional operations, told Bloomberg in January. The target is to sell 15,000 electric vehicles in India this year.

Investments from elsewhere do not appear to be risky. After meeting Indian Prime Minister Narendra Modi in the US last month, Elon Musk said Tesla Inc is likely to make significant investments in the country.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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