Centre Rejects BYD Motors’ Proposal Worth $1 Billion To Set Up EV Manufacturing Unit

Centre has reportedly rejected BYD Motors proposal to set up a four-wheeler manufacturing facility worth $1 billion in partnership with Hyderabad-based Megha Engineering and Infrastructures Ltd, as per a report by The Economic Times.

Both the companies had submitted an application to the government to the Department for Promotion of Industry and Internal Trade (DPIIT) regarding the proposal to set up a four-wheeler manufacturing unit in Hyderabad.

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According to the ET report, DPIIT had sought opinions from other departments on the investment proposal. "Security concerns with respect to Chinese investments in India were flagged during the deliberations. Existing rules do not allow such investments,” officials were quoted as saying by ET.

DPIIT had proposed to manufacture 10,000-15,000 electric cars a year. Megha Engineering was putting up the capital while technology and know-how was to come from BYD.

BYD, which is a leading electric vehicle maker in terms of sales, has launched two EV models in India. The EV company is offering technical support to Olectra Greentech for its electric buses.

The government had made it mandatory for foreign companies, especially countries which are sharing land borders,  to take approval for making any investments in India under the foreign direct investment, in April 2020.

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However, the policy does not mention any country but, as per reports, it was intended to prevent Chinese companies from acquiring entities in India following the Covid-19 pandemic.

The DPIIT is already scrutinising Chinese automobile firms having ties with Indian companies following allegations that some Chinese auto companies have on-boarded proxy Indian partners to act as a front for them, without any strategic long-term intention of moving manufacturing capabilities to India, according to the ET report.