Let Tesla build a factory in India? No, this time Modi said "no". On April 23, the Economic Times reported: Recently, India introduced new regulations to give the green light to foreign-funded car companies that have a direct investment of 500 million US dollars in India and achieve production within three years, promising to give a series of preferential treatment such as tariffs. However, this "favor" is likely to turn Chinese automakers away.
Yes, the Global Trade Research Initiative (GTRI), a homegrown think tank in India, may have been "furious" about this rule. The report was hoarse, asking Modi to "restrict investment and imports of Chinese own-brand cars to India", arguing that the rule could give Chinese companies the opportunity to "occupy the Indian domestic market on a large scale".
One stone stirs up a thousand waves. GTRI's remarks have attracted Modi's attention. According to an internal source, in order to "ensure its own safety", Modi is likely to refuse to allow Chinese-funded car companies, including BYD, to enjoy the above preferential policies.
This is a heavy blow to the head! It is also Modi's latest statement to prevent Chinese-funded enterprises from entering the domestic market.
This kind of "Sinophobia" seems to have been in India's mind for a long time. Last year, Mr. Modi rejected BYD's $1 billion plan to build an electric vehicle factory in India, citing "concerns about the safety of investment."
It seems that Modi harbors unwarranted panic and distrust of Chinese companies entering the Indian market. Indian think tanks such as GTRI blindly exaggerate the so-called "ambitions" of Chinese companies in India, which undoubtedly adds insult to injury, making Modi's wariness of Chinese companies fall into a vicious circle.
So, what is the underlying reason for India to be so closed and conservative, small-bellied chicken intestines?
It has been more than 70 years since the establishment of diplomatic relations between China and India. The two countries used to be "close" compatriots and Poland, but since the Sino-Indian friction in the 60s of the 20th century, bilateral relations have been shrouded in shadows. It was not until the 80s of the last century that relations between the two countries warmed up. But even so, it is difficult to hide a deep-seated wariness of China in India.
Today, with China's rise in power, there is no shortage of voices in India that it sees as a "threat". The root cause of this pernicious prejudice and hatred is the key motivating motivator that drives Modi's defense against Chinese companies. The irony is that India's actions are full of ideological barriers and geopolitical anxieties.
However, this unnecessary worry may be more due to India's wishful thinking and self-feeling about its own industrial strength. In fact, the automotive industry is India's biggest weakness. In 2022, India's vehicle production was only 2.28 million units, far behind China's 26.85 million units. In the field of electric vehicles, India is even poorer and whiter, and talks about paper every day.
Under such circumstances, it is undoubtedly the best choice to face up to the development strength of China's automobile industry, take the initiative to learn advanced technology and management experience from China, and actively introduce Chinese investment. After all, openness is the greatest progress.
Unfortunately, Modi doesn't seem to be aware of this. On the contrary, it harbors a sense of fear, unwarranted obstacles, and narrow-minded suspicions, leading to an impasse in benign and mutually beneficial cooperation.
Analysts pointed out that the threshold of "$500 million direct investment and production within three years" in the new regulations has almost turned off the vast majority of Chinese enterprises. Foreign companies are required to obtain approval for investment in India, and it may be difficult for relevant parties to give Chinese enterprises the opportunity to "pass the customs".
From this point of view, Modi's so-called "open up" new policy seems to be more like throwing a "closed door" for Chinese car companies. And this is his own "slamming his legs behind closed doors".
Once the rejection of China's leading enterprises in the field of new energy vehicles and other fields to invest in India, it will certainly bring a heavy blow to the development of India's new energy vehicle industry.
Chinese EV companies have won more and more share and praise in the global market. The technical level and cost-effectiveness of brand products such as BYD and NIO are favored by consumers around the world. If India rests on its laurels and closes its door, it will undoubtedly cause India to miss out on a large amount of foreign investment and aggravate the backwardness of its auto industry.
Modi's "closing the door" may be difficult to stop the pace of Chinese companies taking off. Even if India says "no" to Chinese investment, the rest of the world will enthusiastically open its arms. At that time, Chinese companies will not hesitate to look at other potential growth markets, and India itself will probably be the only one.
People once pinned high hopes on the relations between China and India, hoping that the two countries would be able to get out of the haze and regain close friendship. But now it seems that this vision has added a new obstacle. While Chinese companies are firmly and forcefully integrated into the world, India's closed mentality makes the road to friendship even more difficult.
Once upon a time, people with ulterior motives tried to use various means to split the friendship between China and India. Now, isn't Modi's approach cutting off the normal opportunities for cooperation between the two countries in industrial development in another way? Countries should respect and appreciate each other with an open and inclusive mind, so that sweet cooperation can bear fruit.
We still hope that India can put aside its prejudices, face up to the strength of Chinese enterprises, and promote mutual benefit and win-win cooperation between the two countries. Only in this way can the development of India's automotive industry be expected to be on a healthy track. Otherwise, blindly conserving and closing will only destroy the broad prospects of the country's industry in the end.
Although Modi's motives may be motivated by "security" considerations, his approach to preventing Chinese companies from entering the Indian domestic market is undoubtedly putting the cart before the horse. This kind of "closed-door" policy will not hinder the internationalization process of Chinese enterprises, but will only destroy their future and miss development opportunities.