The Indian government dismissed the plan from BYD and Hyderabad-based Megha Engineering and Infrastructures Ltd. Due to national security concerns, according to sources asking not to be identified as the decision is not yet public. The sources have cited concerns over Chinese technology.

Foreign direct investment in India’s automobile sector doesn’t typically require approval. Investment bids from countries that share a border with India, however, are subject to political and security clearance by the respective ministries - of external and home affairs. Representatives for Megha, which was established in 1989 and runs infrastructure projects in sectors from power to transport.

India’s action in restricting Chinese investment follows several deadly clashes along the disputed border between the two nations, which have soured relations. China’s Great Wall Motor Co. failed to buy a mothballed General Motors Co. plant after it couldn’t get approval to close the deal.

Movement of BYD in the last five years. (Source: TradingView)

Sources:

https://www.bloomberg.com/news/articles/2023-07-24/india-blocks-1-billion-bid-by-china-s-byd-to-set-up-ev-factory?srnd=industries-v2

https://www.ft.com/content/c83f531d-fa06-48ae-ad23-2b8edc9d2009

https://edition.cnn.com/2023/05/08/cars/china-byd-vietnam-cars-hnk-intl/index.html

https://mea.gov.in/Portal/ForeignRelation/China_October_2017.pdf

https://www.chathamhouse.org/2023/03/india-china-relations-quad-answer