[NEW DELHI] China’s BYD is forging ahead with its attempts to expand in India despite roadblocks from the government that are preventing the electric vehicle maker from conducting key business dealings there.
Like most Chinese companies, BYD has been unable to obtain visas for executives after a deadly clash between Indian and Chinese soldiers along a disputed Himalayan border in 2020 sparked a major deterioration in political ties. That’s seen the EV giant resort to holding board meetings and high-level business interactions in Colombo in Sri Lanka and Kathmandu in Nepal, and even as far away as Singapore, according to sources familiar with the matter.
Ketsu Zhang, BYD’s managing director for India, has been unable to obtain a work permit since he left the EV maker’s local base in Chennai, despite government efforts to facilitate his travel, said the sources, who asked not to be identified because they’re not authorised to speak publicly.
Zhang worked from the carmaker’s headquarters in Shenzhen in 2021 before moving to Tokyo this year, they said. From Japan, he oversees Asian markets including India, the sources said.
An on-the-ground presence is particularly important for manufacturers, given the need for quick decision making, addressing productivity issues and establishing community ties.
Cold shoulder
The cold shoulder is mutual. As recently as March, travel restrictions were still being wielded in the political spat. That month, an Indian contingent wanting to visit a major meeting of BYD car dealers in Shenzhen had to be scaled down after the majority of participants, including the company’s employees based in India, were unable to obtain visas, a source familiar with the matter said.
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A representative for BYD in India declined to comment.
Despite the operational difficulties, BYD has proved popular with Indian drivers, sales in the first half of this year are nearly touching the total units sold in 2024.
Indian officials have been clear that they will not welcome investment from the carmaker – Commerce Minister Piyush Goyal said earlier this year that it’s a “no” to BYD due to caution around the nation’s strategic interests.
India has already rejected BYD’s US$1 billion plan to build a plant in partnership with a local company. This leaves the Chinese firm unable to qualify for reduced tariffs on imported EVs in exchange for establishing a substantial manufacturing presence in India.
The freeze contrasts with the experience of Tesla Its chief executive officer Elon Musk met with India’s Prime Minister Narendra Modi in the US earlier this year. The US carmaker opened its first showrooms in India this month, with deliveries set to begin as early as August.
Tesla does not have plans to establish local manufacturing, meaning it faces import taxes of as much as 110 per cent for fully-assembled vehicles.
Expanding overseas is critical for BYD, which risks missing its target to sell 5.5 million cars this year as demand in China stagnates and it draws the ire of Beijing following rounds of heavy price discounting.
But without the ability to invest in manufacturing in India, BYD relies on its assembly plant in the southern city of Chennai, which has an annual capacity of 10,000 to 15,000 units, to meet Indian demand.
Hefty duties
The company also imports most cars it sells in India, but hefty duties, aimed at shielding domestic firms, effectively double the cost of a vehicle and India restricts volumes unless a model has received a local roadworthiness certificate.
While tensions between China and India are thawing, it’s unclear whether curbs on professional visas will be lifted or if BYD will ever be welcomed with open arms.
Still, there are tentative signs of progress. Earlier this month, India allowed Chinese nationals to apply for tourist visas again. BLOOMBERG
