NEW DELHI, July 28 (Reuters) – China’s BYD (002594.SZ) has told its India joint-venture partner it would shelve plans for a new $1-billion investment to build electric cars after its investment proposal faced scrutiny from New Delhi, two people with knowledge of the discussions said.
BYD and its partner, privately held Megha Engineering and Infrastructures submitted a proposal to the Indian government in April to jointly build electric cars in India, Reuters reported earlier this month.
But in the initial review, officials from three Indian ministries, including finance and external affairs, raised what two Indian officials described as security concerns about investment from the Chinese company and signalled opposition.
BYD executives told Megha Engineering last week that the battery and EV maker wanted to drop pursuit of the investment, according to the two people with knowledge of that exchange.
It was not immediately clear whether BYD could have second-thoughts, and as of Thursday BYD had not formally withdrawn the investment proposal from government review, the two officials with knowledge of the review said.
BYD, China’s largest EV maker, declined to comment on the status of its investment proposal and whether it would pull the plan to produce electric cars in India.
In a statement to Reuters, the company said it has had a presence in India for 16 years, selling both passenger cars and electric-drive buses.
India’s finance, external affairs and home ministry did not reply to an email seeking comment. Megha Engineering did not respond to request to comment.
During a meeting last week, Hyderabad-based Megha Engineering urged BYD to wait for more clarity on the situation before moving to drop the electric cars manufacturing plan, according to the two people with knowledge of the discussion.
BYD had understood its investment proposal would be politically charged because of the scrutiny of Chinese investment in India and had attempted to head off concerns, the two people with knowledge of its planning said.
For instance, the proposal said voice-activated commands for apps would be available in Indian languages in BYD electric cars built in India and that all data from the vehicles would be housed in India, one of the people said.
BYD had proposed starting production in India by 2025, the people familiar with the plan said.
India began subjecting investment from China to closer scrutiny in 2020 amid a series of border clashes between the two countries.
China’s Great Wall Motor shelved its plans to invest $1 billion after failing to get clearances from the Indian government.
A final decision on whether to approve BYD’s investment proposal would be taken by Indian ministries of trade and heavy industries.
BYD, the world’s largest producer of EVs and plug-in hybrid vehicles, entered the Indian market in 2007 producing batteries and components for mobile phone makers.
In 2013 it started building electric buses in India with Megha Engineering, under a joint venture company called Olectra Greentech (OLEC.NS).
BYD, which has already invested over $200 million in India, markets the Atto 3 electric SUV and the e6 EV to corporate fleets and plans to launch sales of its Seal electric sedan later this year.
BYD has sold about 1,950 cars in India since starting sales in 2022, according to government registration data.
India’s EV market is small but growing with domestic automaker Tata Motors (TAMO.NS) dominating sales. Electric models made up less than 2% of total car sales in 2022 but the government wants to grow this to 30% by 2030.
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Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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