In an unexpected turn of events, Chinese electric vehicle manufacturer BYD has publicly denied reports claiming it planned to establish a manufacturing plant in Telangana, India. The EV giant dismissed these reports as “untrue” in an official statement released on its WeChat account, contradicting widespread talk about a major investment in the Indian market.
Recent reports had suggested BYD was poised to invest approximately 10 billion yuan (US$1.4 billion) to build a production facility in Hyderabad. These reports indicated that the company had engaged in extensive discussions with the Telangana government, which had allegedly pledged complete support for the project, including land allocation at one of three potential sites near Hyderabad.
The public denial comes amid a challenging regulatory landscape for Chinese investments in India. Media reports indicate that visa restrictions may be a significant factor in BYD’s decision-making process. According to these reports, the Indian central government has not cleared visas for BYD’s top executives to travel to India for crucial discussions with stakeholders, effectively stalling any potential deal.
This isn’t the first roadblock BYD has encountered in its attempts to establish manufacturing operations in India. In 2023, the Indian government reportedly rejected a $1 billion investment proposal jointly submitted by BYD and its local partner, Megha Engineering and Infrastructures Ltd (MEIL). That proposal, valued at approximately ₹8,200 crore, underwent scrutiny from multiple government ministries before being declined.
BYD currently operates in India through its subsidiary, BYD India, focusing primarily on electric buses and passenger vehicles. However, without local manufacturing capabilities, the company is forced to import vehicles from China, resulting in high import duties that significantly increase prices and limit market penetration.
Establishing a local production facility would substantially reduce costs, potentially making BYD more competitive in India’s rapidly growing electric vehicle market. Despite showing strong interest in global expansion across Southeast Asia, South America, and Europe, BYD has yet to confirm any large-scale manufacturing investments in India.
Industry analysts suggest BYD may reconsider its investment plans if regulatory conditions become more favorable. The company’s strategic retreat highlights the complex geopolitical considerations influencing India’s electric vehicle industry, as the country balances its ambitions to become a global EV manufacturing hub against security concerns related to Chinese investments in critical sectors.
For now, BYD’s public denial effectively puts the brakes on what would have been one of the largest foreign investments in India’s emerging electric vehicle ecosystem, leaving questions about the future of high-volume, affordable electric vehicles in the Indian market.
