India rejects BYD plan for $1 billion unit in TS

The Centre has turned down BYD Motors' proposal to establish a $1 billion four-wheeler manufacturing facility in India in collaboration with Hyderabad-based Megha Engineering and Infrastructures Ltd (MEIL).

The joint application by the two companies to the Department for Promotion of Industry and Internal Trade (DPIIT) aimed to build an electric vehicle plant in Hyderabad. However, the Centre rejected the proposal, citing security concerns and border tensions with China.

Earlier reports had indicated that MEIL, along with their Chinese partner BYD Co, had expressed interest in setting up an electric vehicle manufacturing plant in Telangana, with a joint investment of over $1 billion (around 8,000 crore). The report also mentioned that once the necessary approvals were obtained, the companies would approach the state government for land and



other required facilities.

However, a subsequent report revealed that the Indian government was cautious about permitting Chinese electric vehicle maker BYD to establish operations in the country due to security concerns and ongoing border tensions. To address these concerns and control foreign investments, the Centre now requires neighbouring countries, including China, to seek approval from the Indian government before investing in Indian firms.

A panel headed by the Union home secretary assesses such proposals to ensure adherence to norms, particularly in light of the Covid-19 pandemic and strained relations between the two countries. This step has been implemented as a precautionary measure to prevent Chinese entities from circumventing regulations while acquiring companies in India.