Govt rejects Chinese BYD-Megha Engineering's $1 billion proposal to establish EV plant

The Indian government has turned down a $1 billion investment proposal from Chinese electric car manufacturer BYD and its partner Megha Engineering and Infrastructures Ltd (MEIL), based in Hyderabad, to establish an electric vehicle manufacturing plant, according to reliable sources.

Domestic infrastructure major MEIL and BYD, in a joint venture, put forth a plan to set up an electric vehicle (EV) manufacturing plant in Telangana, with a total investment of $1 billion (approximately Rs 8,200 crore).

The proposal was submitted to the Commerce and Industry Ministry and was subsequently circulated for scrutiny and approval by the ministries of heavy industries, external affairs, and home affairs.

Ultimately, the proposal was discussed and rejected by the authorities.

BYD-MEIL 

Both BYD and MEIL have not yet responded to requests for comments on this development.

The proposal underwent thorough scrutiny due to the Foreign Direct Investment (FDI) rules, which mandate government permission for any proposal involving investments from countries sharing a land border with India.

Press Note 3 specifies that the government's prior approval is essential for foreign investments from countries that share a land border with India. These countries include China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.

Presently, BYD acts as a technology partner to MEIL's Olektdra.

MG Motor 

Industry insiders reveal that MG Motor, a British brand owned by China's largest automaker SAIC Motor Corp, has been awaiting government approval to secure funds from its parent company.

The automaker has been seeking capital for expansion, but with limited success so far, it is now exploring other avenues to raise the required funds.

It's worth noting that from April 2000 to March 2023, India received $2.5 billion in FDI equity from China.

(With PTI Inputs)