The Chinese Firm Build Your Dreams Auto Co., Ltd has decided to withdraw its proposed investment in its Joint Venture India of $1 billion to build electric cars after quite a Reluctance, hesitation and scrutiny from New Delhi. The scrutiny originated from the alleged security reasons concerning the planned investment by the Chinese Company in India from the Government Officials of Indian ministries of Finance and External Affairs.
Build Your Dreams is the automotive subsidiary of the publicly listed Chinese manufacturer BYD company.
The DPIIT is already on its heels to judge and examine every Chinese automobile firm having or wanting to have ties with the Indian Front companies. Reports have been made that sometimes these restrictions have been tried to compromise and some firms even have presented some proxy Indian partners to act as a front for the existing ones. China is also suspected of not having any long term strategic plan to move its manufacturers in partnership with India.
Beginning of the BYD’s Plan
The plan of BYD was started in 2020.
Chinese company BYD had plans to joint venture with the Hyderabad-based Mega Engineering and Infrastructures Limited (MEIL) for setting up a 10,000-15000 unit four wheeler making factory in Hyderabad. For this plan, proposals had been kept in front of the Department for Promotion of Industry and Internal Trade (DPIIT).
But Great Wall Motor, a privately owned automobile manufacturer backed away with its plans of $1 billion investments after too much checking and failure to get clearances from the Indian Government.
A unit of MEIL has already developed electric buses with technical support from the BYD. And the company is now preparing to serve it’s already received 2000 orders of approximately ₹3000-3500 crores.
What Caused the Scrutiny against BYD?Â
The main cause for the scrutiny can not be determined as India and China differ on a variety of terms.
INDO-CHINA BORDER RIVALRY
The main reason for the scrutiny by Indian Government Officials could be the India-China border dispute. The border dispute between the two countries has been raging for quite a long time. But the recent surges have been seen from 2020.
The worst tension between the Indian Soldiers and the Chinese Army was seen in 2022 at the LAC or Line of Actual Control. Amid these circumstances, it might be difficult to embrace the fact that a Chinese company is willing to invest $1 billion in the Indian market for Electric Vehicles.
FAULTS IN EXAMINATION OF THE PLAN
Also after a close examination of the plan of Chinese Company and the Hyderabad manufacturer, one of the Government Officials reported that the equity structure of the Joint Venture is not being clearly defined by the company and the mechanisms to send back the royalty to the Chinese Firm BYD are taking too long for the conclusion of the consideration.
THE COVID -19 PANDEMIC
COVID -19 was a serious situation faced by the country after which India is very cautious of every investment made by any Chinese Firm Or and other investments wanting to be made in India. An approval is seeked by the committee headed by the Union Home Secretory to prevent the Chinese firms from evading rules to acquire Indian Entities.Â
All these factors are somehow giving rise to the suspicion of the Indian Government Officials as it’s a delicate matter and concerns the nation’s safety, a government official reported.
BYD Competition in India
Despite the fact that India is the world’s third largest Car market, both the leading EV making superpowers, China and USA are devising ways to enter the Indian Market with price friendly models.
