As India actively seeks investment from Elon Musk’s Tesla Inc., it has decided to restrict market access to Chinese electric car maker BYD Co. on strategic grounds. The government still remains hesitant to clear some foreign investments, particularly those from China, Commerce Minister Piyush Goyal said.
This is a follow-up to BYD’s scheduled $1 billion investment being rejected last year when it was proffered to India with a local partner. Another Chinese vehicle maker, Great Wall Motor Co., also backed out of India after failing to get the regulatory approvals needed.
The lack of transparency in Chinese ownership patterns of companies and the potential links between Chinese companies and the Chinese state and military have alarmed official representatives. Grievances of unfair subsidization by the state, for example, in the form of loan write-offs, likely to suppress competition, have also been made.
India, however, is going after Tesla aggressively and offering incentives to establish manufacturing here. It is part of India’s overall policy to attract high-technology investment without sacrificing its interest in the national security domain.
India’s strategy of requiring government sanction for investment by countries with a land border with India is preceded by continued Chinese investment monitoring. The move attempts to see that foreign investment does not compromise India’s strategic interests.
India continues to walk a tightrope between attracting foreign investment and providing national security and equitable competition as it finds its niche in the international electric vehicle market.
Click Here to get the latest EV news and exclusive updates from EV Mechanica on WhatsApp!