BYD’s billion-dollar attempt to produce electric vehicles in India has run into difficulties.

A proposal for establishing an electric car manufacturing facility in Hyderabad has been made by BYD and Megha Engineering and Infrastructures, which is situated in Hyderabad.

The plan by Chinese auto giant Build Your Dreams (BYD) to collaborate with Megha Engineering and Infrastructures (MEIL) of Hyderabad to produce electric vehicles and batteries has run into a security snag since New Delhi isn’t ready to permit the company to invest in India, according to a report.

In light of the Center’s stance to bar organizations from across the border from entering the Indian market due to security concerns surrounding some of them, officials from the home and external affairs ministries are reluctant to provide Chinese players access, the Times of India said on July 15.

According to the report, New Delhi is concerned that many joint ventures “arranged” by Beijing-based companies are “heavily weighed and controlled by the foreign partner,” while the Indian company is essentially a toy company with minimal decision-making power.

According to several press reports, the Department for Promotion of Industry and Internal Trade was approached with the plan, which stated that the investment would be close to $1 billion.

Similar worries about BYD’s joint venture plan were voiced by the Centre because the Chinese business wants to be aggressive in India. Two electric buses have already been created by Olectra Greentech, a division of MEIL, with technical assistance from BYD.

Companies from neighbors who share a land border will need permission to participate in Indian businesses starting in April 2020. These suggestions must first be approved by a commission led by the home secretary. Following the Covid-19 pandemic and tensions along the two nations’ border, the process was deemed essential to prevent Chinese organizations from evading regulations to buy businesses in India.

To stop businesses from adopting the automatic way, the government has put in place strict foreign direct investment (FDI) regulations. These nations have a land border with India.

Great Wall Motors, a Chinese manufacturer, abandoned its $1 billion plan to build a manufacturing facility in Maharashtra, India, in 2022, and it closed its office there. When General Motors chose to leave India, the business was in the running to buy the facility in Maharashtra.

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