India Rejects Chinese EV Maker BYD Over Security Concerns

In a significant development, India has declined a proposal from Chinese automaker BYD to set up a massive $1 billion electric vehicle (EV) factory in collaboration with a Hyderabad-based infrastructure company. This decision was taken amid growing concerns about security implications tied to Chinese investments in India's EV sector. BYD, backed by Warren Buffet, had aimed to capture a substantial portion of India's EV market by 2030 with its ambitious proposal. However, the Indian government's increased vigilance over Chinese firms investing in the country led to heightened scrutiny of the plan.
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India has turned down a proposal from Chinese automaker BYD to establish a $1 billion electric vehicle (EV) factory in collaboration with Hyderabad-based Megha Engineering and Infrastructure. The rejection comes in light of mounting security concerns surrounding Chinese investments in the country, as reported by India’s Economic Times.

BYD’s Ambitious Proposal

Backed by Warren Buffet, BYD submitted its investment proposal with an ambitious goal of capturing 40 percent of India’s EV market by 2030. However, the plan faced increased scrutiny due to India’s heightened vigilance towards Chinese firms seeking investments in the country.

Tense India-China Relations Impact Investments

The rejection of BYD’s proposal takes place amidst strained India-China relations. Great Wall Motor also faced obstacles when trying to invest $1 billion in India through the acquisition of a dormant General Motors plant, as the government withheld approval for the deal. Furthermore, MG Motor India, a subsidiary of Chinese carmaker SAIC Motor, is under investigation for alleged financial irregularities.

Government’s Due Diligence

The Indian Department of Commerce and the Department for Promotion of Industry and Internal Trade (DPIIT) sought opinions from other departments regarding BYD’s proposed venture. The government is cautious about Chinese investments and their implications for national security.

Challenges in India’s EV Transition

India’s transition to electric vehicles has been slower compared to countries like China and the US. This is primarily due to high upfront costs and a lack of charging infrastructure, hindering widespread adoption.

Growing Interest in India’s EV Market

As India pushes further into the EV sector, its largest carmaker, Maruti Suzuki, faces challenges from competitors also venturing into the electric vehicle market. Various automakers are eyeing India’s untapped EV demand and seeking to tap into the growing market.

Independence vs. Assistance

The rejection of BYD’s proposal raises questions about India’s ability to achieve its ambitious EV goals without Chinese assistance. Nevertheless, the country remains committed to its electric mobility vision and actively seeks partnerships and investments to accelerate EV adoption.


India’s decision to decline BYD’s $1 billion EV factory proposal underscores its mounting concerns regarding security and scrutiny of Chinese investments. As India endeavors to bolster its electric vehicle market, it grapples with the challenge of attracting investments while safeguarding economic interests and national security.

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