India rejects BYD to court its rival Tesla to invest

“India has to be cautious about its strategic interests, who we allow to invest,” Commerce Minister Piyush Goyal said Monday.

“As of now, it is a no” to BYD, he told Bloomberg Television’s Haslinda Amin at the India Global Forum in Mumbai.

New Delhi had last year rejected BYD’s $1 billion investment proposal with a local partner, while another Chinese carmaker, Great Wall Motor Co, also exited India after failing to secure regulatory clearances.

Goyal’s statement comes on a day when US President Donald Trump threatened to slap additional 50% import taxes on China if it doesn’t withdraw its planned retaliatory tariffs by April 8.

India’s hardline posture also highlights a broader protectionist approach to car imports. With a 100% duty on fully built vehicles — by far the highest among major economies — India has long shielded domestic players with steep tariffs.

But with free-trade talks with the US and European Union gathering pace, pressure is mounting to open up the world’s third-largest auto market to foreign players.

“India has a lot of elbow room for trade deals with developed nations,” Goyal said, adding that the country will be cautious about “dumping” from China.

India wants to be a global hub for electric vehicle production, but high entry barriers — compared to 2.5% for the US, 10% in Germany, and up to 25% in China — serve as a detriment.

Tesla has stayed away from India, citing high tariffs, while BYD has struggled to secure investment clearances, even as demand surges for affordable EVs and compact SUVs priced below $25,000.

That’s where India’s homegrown automakers, such as Tata Motors Ltd. and Mahindra & Mahindra Ltd., thrive.

The local automakers have resisted any tariff relaxation that might allow foreign rivals to undercut them on price, especially as the government ramps up incentives for EV production.