BYD was planning to setup a factory in Hyderabad
The Indian government has turned down a proposal by BYD Motors to establish a 1 billion USD electric vehicle factory in Hyderabad. The venture was planned in collaboration with Megha Engineering and Infrastructures Ltd, a Hyderabad based company. The proposal aimed to set up an electric vehicle plant and manufacture around 10,000-15,000 electric cars annually.
The Department for Promotion of Industry and Internal Trade (DPIIT) received the application and sought opinions from other departments on the investment proposal. However, during the discussions, concerns were raised regarding security issues associated with Chinese investments in India. As a result, the government rejected the plan, citing that existing rules do not permit such investments.
BYD Motors had already introduced two electric vehicle models in India and was providing technical support to Olectra Greentech, a unit of MEIL, for its electric buses. However, due to the changing foreign direct investment policy in India, government approval is now mandatory for investments coming from countries that share a land border with India. This policy change was implemented to prevent Chinese companies from acquiring Indian entities in the wake of the pandemic.
The DPIIT is currently scrutinising Chinese automobile firms with ties to Indian companies, amid allegations that some Chinese auto companies are using Indian partners as proxies without any genuine intention of establishing long-term manufacturing capabilities in India.