“As of Now, It is a No to BYD”: Union Minister Piyush Goyal Restricts Market Access to the Chinese EV Giant

The Indian government, citing security and investment concerns, has not approved BYD's proposed $1 billion investment in the country. BYD, which had partnered with Hyderabad-based Megha Engineering for its India foray, aimed to set up a manufacturing facility for electric cars. 

However, officials raised red flags over Chinese control of key auto tech infrastructure amid ongoing tensions between the two nations.

Meanwhile, India has signalled a green light to Elon Musk’s Tesla, with policy shifts designed to entice the EV giant to set up shop domestically. 

India Says No to BYD Over Strategic Concerns

BYD, which is the world’s largest EV manufacturer by volume, has repeatedly tried to enter the Indian market. 

However, its proposals have been met with resistance from the Indian government due to national security concerns and a broader regulatory pushback against Chinese investments since border tensions escalated in 2020.

“India has to be cautious about its strategic interests, who we allow to invest,” said Union Minister Piyush Goyal at the India Global Forum in Mumbai. “As of now, it’s a no to BYD” he added.

The minister stated that “We need to be convinced that they will play by the rules of the land”.

Last year, BYD’s ambitious $1 billion plan to build a joint venture with Hyderabad-based Megha Engineering & Infrastructures Ltd. was turned down. 

Officials noted the lack of transparency in the company’s structure and possible state influence in its operations. 

These factors contributed to India maintaining its cautious stance and prioritising strategic autonomy in high-tech sectors like EVs.

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India Paves the Way for Tesla's Entry

In contrast, India is actively courting Tesla to establish a presence in the country. 

The government has introduced a policy that offers duty concessions to foreign automakers willing to commit to local manufacturing within a three-year timeline. These incentives are part of India’s broader strategy to promote advanced manufacturing, reduce carbon emissions, and create employment opportunities.

Tesla recently held a public hiring spree in Mumbai to fill a number of positions, including delivery managers, customer support specialists, and sales and service advisers.

It also began homologating—that is, adhering to local sales regulations and standards—its Model Y and Model 3 and established showrooms in Delhi and Mumbai.

With a target of 500,000 units per year, the estimated cost of Tesla's proposed India factory is $2–3 billion, far less than the $5 billion and $7 billion gigafactories in Texas and Berlin, respectively. India's lower labour and land costs—$2–5 per hour compared to $25–36 per hour in the US and $35–45 per hour in Germany—help.

The talk for contract manufacturing stems from India's 2024 EV policy provisions for duty savings, which Tesla believes aren't appealing enough.

While India’s EV market is still in its early stages, with electric vehicles accounting for just 2% of total vehicle sales, the government aims to increase this share to 30% by 2030.

Collaborations with global leaders like Tesla are seen as pivotal in achieving this target and strengthening India's position in the global clean energy movement.

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