With a 100 per cent duty on fully built vehicles – by far the highest among major economies – the country has long shielded domestic players with steep tariffs
[DELHI] India will restrict market access to BYD even as it courts investments from US rival Tesla, showing New Delhi’s lingering angst with China despite recent signs of a thaw in the relationship.
“India has to be cautious about its strategic interests, who we allow to invest,” Commerce Minister Piyush Goyal said on Monday (Apr 7). “As of now, it is a no” to BYD, he said.
New Delhi had last year rejected BYD’s US$1 billion investment proposal with a local partner, while another Chinese carmaker Great Wall Motor 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 per cent import taxes on China if it does not withdraw its planned retaliatory tariffs by Apr 8.
India’s hardline posture also highlights a broader protectionist approach to car imports. With a 100 per cent 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 (EV) production, but high entry barriers – compared to 2.5 per cent for the US, 10 per cent in Germany, and up to 25 per cent 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 US$25,000.
That’s where India’s homegrown automakers such as Tata Motors and Mahindra & Mahindra 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. BLOOMBERG
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