he Indian government has placed restrictions on BYD’s expansion efforts, dealing a setback to the Chinese electric vehicle (EV) manufacturer’s ambitions to produce locally. Speaking about the company, Commerce Minister Piyush Goyal recently commented, “India must remain mindful of its strategic interests and carefully evaluate who is allowed to invest.”
Expansion Plans Denied
In an interview with Bloomberg Television, Goyal confirmed that, “As of now, it is a no” regarding BYD’s request to expand operations in India. Last year, in July 2023, the government declined a $1 billion (approximately ₹8,200 crore) proposal for a joint manufacturing venture between BYD and Megha Engineering & Infrastructures, based in Hyderabad.
Not the First Chinese EV Maker to Face Hurdles
BYD isn’t the only Chinese automaker to face regulatory roadblocks in India. Great Wall Motor had outlined a plan to enter the Indian market in 2020, including the acquisition of GM India’s Talegaon manufacturing plant. However, delays in finalizing an MoU with the Maharashtra government effectively stalled the company’s plans indefinitely.
Government Concerns Over Chinese Investments
Authorities have voiced concerns over opaque ownership structures among Chinese firms, possible affiliations with the Chinese government and military, and the challenges posed by China’s classification as a non-market economy. These issues raise red flags about unfair competitive practices such as state subsidies and loan forgiveness, which could distort the market.
BYD’s Current Presence in India
Currently, BYD offers fully imported models in India, including the Seal sedan, Atto 3 and Sealion 7 SUVs, and the eMax 7 MPV. With no green light for local manufacturing, the company is expected to continue importing completely built units (CBUs) to maintain its presence in the Indian EV market.
