The Indian government has reportedly rejected a $1 billion proposal by Chinese carmaker BYD Co. and Hyderabad-based Megha Engineering and Infrastructures Ltd. to build an electric-vehicle plant in partnership. The decision was based on national security concerns, with worries about the use of Chinese technology. Unlike other foreign direct investments in India’s automobile sector, investments from countries sharing a border with India require political and security clearance from the relevant ministries.
BYD declined to comment on the matter, while Megha Engineering has not responded to inquiries. The Finance Ministry, Heavy Industries Ministry, and Ministry of Home Affairs, which were assessing BYD’s proposal, have not provided any comments.
This rejection comes amid India’s increasing restrictions on Chinese investments following border clashes between the two nations, which have strained bilateral relations. BYD had ambitious plans for India, aiming to capture 40% of the domestic EV market by 2030 and sell 15,000 electric vehicles in the country this year.
On a separate note, Elon Musk of Tesla Inc. has expressed interest in making a significant investment in India, indicating that investments from other countries may not be at risk.