Centre ticks off BYD Motors' $1-billion India plans to build EVs, batteries

Olectra Greentech, a unit of MEIL, has already developed two electric buses with technical support from BYD.

The government has rejected Chinese electric vehicle giant BYD Motors and Megha Engineering and Infrastructures Ltd (MEIL) plan to set up a $1 billion four-wheeler manufacturing facility in India.

This website last week reported that BYD’s proposal to tie up with Hyderabad-based MEIL for electric cars and batteries has hit a security roadblock, as the Centre was not keen to give the green signal to the Chinese entity to invest in India.

“Security concerns with respect to Chinese investments in India were flagged during the deliberations,” an official familiar with the matter told the Economic Times. Another official said that the existing guidelines do not permit such investments.

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In its proposal to the Department for Promotion of Industry and Internal Trade (DPIIT), the venture made a pitch to manufacture up to 15,000 electric cars a year. MEIL was infusing money while technology and knowhow was to come from the Beijing-based company.

Government nod needed

Olectra Greentech, a unit of MEIL, has already developed two electric buses with technical support from BYD.

Since April 2020, firms from land-border-sharing neighbours need approval to invest in Indian companies. A committee headed by the home secretary has to approve such proposals first. The step was made obligatory to check Chinese entities from bypassing rules to acquire companies in India following the Covid-19 pandemic and border skirmishes between the two countries.

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Furthermore, the DPIIT is already examining Chinese automakers having ties with Indian firms following allegations that some Chinese companies have joined proxy Indian partners to act as a front for them, without any strategic long-term purpose of moving manufacturing units to India, the report said.