India Prioritizes Tesla While Restricting BYD Entry Amid Strategic Caution
India has signaled a strategic shift in its foreign investment approach, warmly inviting Tesla Inc. while maintaining a restrictive stance toward China’s EV leader BYD Co. According to Commerce and Industry Minister Piyush Goyal, India will not open its doors to BYD at this time, citing the need to safeguard national interests.
“India must protect its strategic concerns and carefully evaluate who is allowed to invest,” Goyal stated during the India Global Forum in Mumbai. “As of now, the answer is no to BYD,” he emphasized in an interview with Bloomberg.
India Rejects BYD’s Proposal Amid Geopolitical Tensions
This isn’t the first time India has blocked Chinese automotive investment. In 2023, a proposed $1 billion investment from BYD in collaboration with a local partner was rejected. Similarly, Great Wall Motors, another major Chinese automaker, exited India after regulatory bottlenecks hindered its expansion plans.
India’s decision aligns with broader scrutiny of China’s trade behavior, which many global economies accuse of exploiting unfair trade advantages. Goyal remarked that the World Trade Organization’s (WTO) inclusion of China was expected to transform the country into a more transparent player, but the opposite has occurred.
“China’s rise was not built on fair market practices. The foundation of its growth violates the spirit of global trade norms,” Goyal noted.
High Tariffs Protect Indian Automakers
India has traditionally used high import duties—100% on fully built cars—to protect its domestic auto industry. While this policy has helped shield local manufacturers, it has also drawn criticism amid growing international pressure to liberalize the sector.
With free trade agreements (FTAs) with the United States and European Union under negotiation, India is walking a fine line between protecting its homegrown brands and encouraging foreign direct investment (FDI).
“India has the flexibility to strike balanced trade deals with developed economies. However, we remain cautious of any market flooding, especially from China,” Goyal added.
Tesla’s Entry into India Gains Momentum
While China’s EV players face roadblocks, Tesla’s prospects in India are improving. Reports suggest Tesla is planning a local manufacturing plant and exploring partnerships to assemble vehicles domestically, benefiting from reduced import taxes and a rising demand for electric vehicles.
This contrast in treatment reflects India’s evolving trade priorities, which now favor collaboration with trusted strategic partners over countries with opaque practices and geopolitical tensions.