India is limiting foreign direct investment using policy started during Covid-19. This is stopping money from countries “which shares land border with India” along with others. Chinese technology, car, and energy investments are targets of this policy.
India is acting on restrictions under the Foreign Direct Investment policy of the DPIIT/Ministry of Commerce. A local press source (PTI) numbered the proposals pending at 40-50 affected from all countries.
A failure to approve a USD$1B investment from Chinese BYD is a key example of the Indian Government’s current policy. BYD already supplies smartphone batteries, busses, and a limited number of electric vehicles to the Indian marketplace. The proposed large investment failed to gain a rapid approval.
Chinese Great Wall Motor, in 2022, had a plan to invest up to USD$1B in the Indian market and was turned down by the Indian Federal government. Great Wall Motor had prepared to enter the Indian marketplace since 2020. Failure to obtain approvals meant a USD$300M deal for Great Wall Motor to take over an abandoned General Motors (US) plant collapsed.
Chinese SAIC’s MG Motor unit has been pushed by the same restrictions to look for a local Joint Venture (JV) partner. The formerly British brand, now owned by SAIC, had looked since 2020 for local investment partners willing to come up with the RS5000 crore of additional capital.
For more analysis and notes see http://www.ekalore.com
“Press Note 3” (2020 Series), “Review of Foreign Direct Investment (FDI) Policy for Curbing Opportunistic Takeovers/Acquisitions of Indian Companies Due to the Current Covid-19 Pandemic”, Government of India Ministry of Commerce & Industry, Department for Promotion of Industry and Internal Trade, FDI Policy Section, April 17, 2020. (with later amendments and clarifications)
Comentários