India Turns Down BYD's Investment, Opens Doors To Tesla — Details

India will limit market access for BYD while actively seeking investments from its US competitor, Tesla, reflecting New Delhi's ongoing caution towards China despite recent indications of a thaw in bilateral relations. "India has to be cautious about its strategic interests, who we allow to invest,” Commerce Minister Piyush Goyal stated on Monday. "As of now, it is a no to BYD," he told Bloomberg Television’s Haslinda Amin during the India Global Forum in Mumbai.

Last year, the government rejected BYD’s $1 billion investment proposal with a local partner, while another Chinese automaker, Great Wall Motor, also exited India after failing to secure regulatory approvals.

Commerce Minister Goyal’s remarks came on the same day US President Donald Trump threatened to impose an additional 50 per cent import tax on China unless it withdraws its planned retaliatory tariffs by April 8.

India’s firm stance also reflects a broader protectionist approach to car imports. With a 100 per cent duty on fully built vehicles—the highest among major economies—India has long protected domestic automakers with steep tariffs. However, as free trade discussions with the US and the European Union progress, there is increasing pressure to open up the world’s third-largest auto market to foreign manufacturers.

"India has a lot of elbow room for trade deals with developed nations," Goyal stated, stressing that the country will remain cautious about potential "dumping" of goods from China.

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In-house EV Boost

Meanwhile, India aims to become a global hub for electric vehicle production, but high entry barriers—compared to the 2.5 per cent tariff in the US, 10 per cent in Germany, and up to 25 per cent in China—pose a significant challenge. Tesla has refrained from entering India due to these steep tariffs, while BYD has struggled to secure investment clearances, despite growing demand for affordable EVs and compact SUVs priced under $25,000.

In this landscape, India’s homegrown automakers, such as Tata Motors and Mahindra & Mahindra, continue to thrive. These local manufacturers have resisted any tariff reductions that could allow foreign competitors to undercut them on price, especially as the government increases incentives to boost domestic EV production.

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