In what may be a hint of the troubles awaiting China as it seeks to become a global economic powerhouse, India has rejected a proposal by BYD and Megha Engineering and Infrastructure to invest $1 billion to build an electric vehicle and battery plant in that country. The story was first reported by Economic Times of India (@paywall) Saturday July 22, 2023.
According to the South China Morning Post And bloombergAn Indian government official was quoted as saying, “Security concerns regarding Chinese investments in India were reported during the deliberations.”
India and China are not on the best side politically. Last year, Elon Musk proposed selling Tesla cars manufactured in Shanghai in India. But that deal was contingent on India lowering car import duties, which could be as high as 100%. India rejected Musk’s request, saying, in fact, if you want to sell electric cars in India, build them in India. Last week, Tesla put forward a proposal to do just that. After a personal meeting with Prime Minister Modi, Musk said his company would build a factory in India “as soon as humanly possible.”
Meanwhile, BYD has said that it expects to capture 40% of the electric vehicle market in India by 2030. This ambition is not as extraordinary as it may sound. Last year, only 1% of all new cars sold in India were electric.
BYD’s investment proposal comes at a time when India is increasing scrutiny of Chinese companies, SCMP He said. Great Wall Motor is also planning to invest $1 billion to build electric cars in India at an abandoned General Motors plant. The Government of India rejected this proposal. It is also investigating alleged financial irregularities by MG Motor India, a unit of Chinese automaker SAIC Motor, which currently does business in India.
The report said that the Indian Ministry of Commerce and the Ministry of Promotion of Industry and Internal Trade (DPIIT) sought opinions from other departments on the proposed project for BYD. India’s shift to electric vehicles lags behind other countries like China and the United States due to higher upfront costs and lack of charging infrastructure, SCMP He said.
For BYD, it may all be about business and the auto industry, but India and China have a long and complex history of military conflict along the more than 2,000-mile border that separates them. China is aggressively flexing its military muscle and building artificial islands in the South China Sea, which it has turned into heavily fortified military bases.
Earlier this year, it launched a sophisticated surveillance balloon across the northern tier of the US states, and is widely believed to maintain tight security for its Chinese nationals working in other countries, including the US and Canada. Not everyone is convinced that Chinese companies looking to invest in other countries are just business ventures. The common belief is that they are intelligence-gathering agents for the Chinese government. Whether or not this is true, the idea is creating some headwinds for Chinese entrepreneurs looking to expand into global markets.
One country that welcomes BYD’s investments is Brazil, which is very happy to see foreign companies injecting new capital into its economy. We hasten to point out that the United States maintains a military presence in 85 foreign countries and has a history of using its military to secure access to oil. Sometimes, work is more than just work.
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