The government has rejected a $1 billion proposal by Chinese EV maker BYD and its Hyderabad partner Megha Engineering and Infrastructures Ltd (MEIL) to build an EV manufacturing plant, sources said.
A joint venture between domestic infrastructure giant MEIL and BYD plans to set up an electric vehicle (EV) manufacturing plant in Telangana with a joint investment of US$1 billion (approx. $82 billion rupees). The proposal has been submitted to the Ministry of Commerce and Industry and circulated to the Ministries of Heavy Industry, Foreign Affairs and Home Affairs for necessary review and approval, the sources said.
They said it was discussed and decided not to approve the proposal.
BYD was not available for comment as email inquiries remained unanswered. MEIL also did not respond to emails seeking comment on the development.
The proposal has come under scrutiny because under foreign direct investment rules, any proposal from investment from countries with India’s land borders must obtain government permission.
According to press note 3, the government has made it mandatory for foreign investments from countries bordering India to obtain prior approval. These countries are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan.
BYD is currently a technical partner of Olektra under MEIL.
MG, the British brand owned by China’s largest automaker SAIC Motor, has been waiting for government approval to raise funds from its parent company, according to industry sources.
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The automaker has been looking to raise capital to fund its expansion for some time.
With little success so far, the company has now started looking at other options to raise the needed capital.
Between April 2000 and March 2023, India received $2.5 billion in FDI equity from China.
First published date: Jul 25, 2023 at 10:38 AM CST