BYD Auto Co. of China has been denied permission to invest US$1 billion in India
India is becoming a popular investment destination for businesses from all over the world. The market is the driving force behind India’s rise as an investment destination. Recently, India surpassed the United Kingdom to become the world’s fifth-largest economy. Besides, India become a US$ 3.75 trillion economy last month.
As India’s economy grows to be a $5 trillion dollar economy around the end of this year and chip manufacturing hub, several Chinese enterprises are drawn to the Indian market. To capitalize on the possibility to benefit from the Indian market, Chinese EV automaker BYD Co. planned to invest in India’s EV industry and to develop a factory in India in collaboration with Hyderabad-based Megha Engineering and Infrastructure Ltd.
The organization submitted its proposal to the Department for Promotion of Industry and Internal Trade (DPIIT) for that purpose. Following receipt of that proposal, DPIIT solicited feedback from other government departments on the investment plan, however, the proposal was outrightly rejected by the Government of India.
India rejected the proposal, citing security concerns in India’s internal affairs, as well as the fact that India’s present norms do not permit such investment.
BYD Auto Co., headquartered in Xi’an, Shaanxi Province, China, is the automobile subsidiary of the publicly traded Chinese multinational manufacturer BYD Company. BYD Auto produces passenger automobiles, buses, lorries, electric bicycles, forklifts, and rechargeable batteries. The company surpassed Tesla, the American EV manufacturing behemoth, as the world’s largest electric vehicle maker in June 2022, stating it had sold over 641,000 EVs in the first half of 2022.
Megha Engineering and Infrastructures is a Hyderabad-based infrastructure firm that has constructed highways, bridges, and power plants. Megha provided the finance, while BYD provided the technology and know-how.
Reasons for Not Allowing Chinese BYD’s Investment
Before 2020, the Indian government accepted billions of dollars in foreign direct investment (FDI) from China, but everything changed after then. China attempted to invade and occupy Indian territory in the Ladakh region in 2020, something it failed to do in 1962. Following that incident, the Indian government banned Chinese apps in India and regulated the country’s foreign direct investment policy, making government clearance essential for investments from nations with which it shares a land border. Such recommendations are decided upon by a committee chaired by the home secretary.
Recently, Indian authorities searched and apprehended Chinese mobile phone manufacturers on suspicion of money laundering. These Chinese mobile phone manufacturers record losses by siphoning money out of the country and sending it back to China via promiscuous investors all over the world. The Indian government also discovered several Chinese businesses involved in money laundering via mobile phone loan apps. The Indian government also nabbed a Chinese person living in India under the name of whom he obtained an Aadhar card and other forms of identification in order to engage in questionable financial operations involving money laundering.
In the pretext of doing business, China conducts shadow money laundering networks all over the world, including in India. The Chinese are concerned about India’s rise because they see it as a serious challenge to their superpower image, and they aim to undermine India’s economy and image in every way they can. India recognizes this geopolitical game, and after detecting suspicious actions in India, the government has chosen not to allow Chinese BYD to invest in the country.