Indian government has raised concerns about China’s non-market economy and potential links of Chinese companies to the PLA
Last month in March, it was reported that BYD will start local manufacturing in India in Hyderabad. The plan was to set up a new manufacturing facility that will have annual production capacity of 6 lakh units by 2032. However, a recent statement by Piyush Goel, Union Minister of Commerce and Industry, reveals that BYD’s expansion plan in India is essentially scrapped for now.
BYD India Manufacturing Plant
Border issues and China’s ambitions in the Indian Ocean and India’s neighbouring countries have prompted government officials to take a cautious approach. While both countries are working to strengthen relations, it may take a long time to settle all the issues and build confidence. These sentiments were echoed by Goyal during his recent interview with Bloomberg Television.
Replying to a query about BYD, Piyush Goyal said that India has to look into its strategic interests. It implies that there will be strict scrutiny in terms of who could be allowed to invest. Goyal clearly said “no” in terms of BYD’s plans to expand its presence in India.
This follows the earlier decision in July 2023 when BYD’s $1 billion (Rs 8,200 crore) investment proposal was rejected by the Indian government. The investment plan comprised building a new production plant in collaboration with Hyderabad-based Megha Engineering & Infrastructures.
Road ahead for BYD in India
Till things improve, BYD is likely to continue using the CBU route to sell its all-electric cars in India. Starting with the Atto 3, BYD has introduced new models at regular intervals. BYD’s India portfolio includes the Seal sedan, Salion 7 water and BYD eMAX 7 MPV. Even with the CBU route, BYD has posted an impressive annual growth of 90.32%. Sales have zoomed to 3,401 units in FY25, as compared to 1,787 units in FY24.
In March, the carmaker registered a YoY growth of 175%. Sales have increased from 144 units in March 2024 to 396 units in March 2025. This has been made possible with the introduction of newer models and expansion of the dealer network. Going forward, BYD will be aiming to further add new dealerships and target Tier-II cities as well.
Hurdles for Chinese carmakers
Due to geopolitical issues between the two countries, Chinese carmakers have faced resistance in terms of investment and local expansion. Earlier, Great Wall Motor’s (GMW) plan to enter India was halted due to regulatory policies that called for strict scrutiny of Chinese investments.
GMW had planned an investment of $1 billion and was looking to acquire General Motors’ Talegaon plant in Maharashtra. However, due to border conflicts and policy changes, GMW exited from India in 2022. As for the General Motors’ plant, it was acquired by Hyundai. China being a non-market economy, policy makers in India have raised concerns about the Chinese government’s influence over China-based businesses.
Lack of transparency in business ownership in China is another concern. Factors like government-sponsored subsidies and loan write-offs for China-based businesses can create unfair competition in overseas markets such as India. These apprehensions have prompted policy makers in India to limit Chinese investment.
