A few key points
Indian authorities are concerned about BYD establishing a joint venture in India with Mega Engineering and Infrastructures.
It is feared that Chinese joint ventures are backed by foreign partners and that there is no control over the technology.
MG Motors and China’s Great Wall Motors have also had their plans thwarted.
Security concerns are preventing India from allowing Chinese electric car maker BYD to establish a presence. The news was reported on media platforms. In partnership with a local company, BYD has proposed investing $1 billion in electric cars and batteries in India.
According to reports, there is “discomfort in the home and external affairs ministries over the entry of Chinese players in the wake of the government’s stand to keep players from across the border out of the Indian market, given the security concerns around several of them”.
“Several government officials have expressed concern about the number of joint ventures “arranged” by Chinese companies that are heavily weighed and controlled by foreign partners – some of which are supported by the government. According to the report, the Indian firm was a dummy entity that did not control technology, decision-making, or other critical knowledge.
Moreover, the aggressive behavior of BYD in India has raised concerns among the Indian government regarding the company.”
It has been reported earlier that BYD has submitted a joint venture proposal to Indian regulators on behalf of Hyderabad-based Megha Engineering and Infrastructures to form an electric vehicle joint venture, Reuters said.
BYD, as per the report, plans to build a full line-up of BYD-branded EVs in India, from hatchbacks to luxury models. BYD, the world’s largest maker of electric and plug-in hybrid vehicles, is rapidly expanding globally to compete with Tesla, which remains the sole leader in electric vehicle sales. If the India investment is approved, BYD will have a presence in every major global auto market except the US.
The Indian government had previously tightened FDI regulations on Chinese companies, thwarting Chinese group Great Wall Motors’ plans. MG Motors, which currently sells cars in India, has also struggled to attract capital investment to expand its operations in India. It is currently working on a proposal to acquire a majority stake and bring its Indian partners on board.
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