The move to scrutinize Chinese FDI may cause delays for Chinese car companies in India.
As we know, the Centre has decided to scrutinize all forms of Chinese Foreign Direct Investment (FDI) in our country. This has already affected MG Motor India’s investment plan. MG Motor India is backed by SAIC Motor, a Chinese state-owned company, and Great Wall Motors (GWM). As part of their initial announcement, SAIC have invested Rs 3,000 crore thus far in MG Motor India but GWM are yet to bring their share to the table and with the scrutiny on Chinese FDI, we expect that move to be delayed even further. A similar situation can be expected to happen to other Chinese car companies that invest in India.
Experts say that, the Centre’s decision will certainly cause some delay and, perhaps, even stall some investments. When contacted by the media house both MG Motor India and GWM refused to comment. Expected delays include holding back import licences, visas and residency permits. Of the Rs 5,000-crorse investment from SAIC, Rs 3,000 crore has been invested thus far. A major part of this Rs 3,000 crore was spent in acquiring the Halol plant and their recent acquisition of an office in Gurgaon. MG’s plan for this year include two SUVs; the Hector Plus and the Gloster. The latter is a full-sized SUV that is expected to take on the Toyota Fortuner. It is expected to be launched later this year. As for GWM, they were expected to take over General Motors’ Talegaon plant by the end of the year but it has not been confirmed yet.
The government’s current stance on FDIs will certainly affect Chinese investments in other manufacturers and ancillaries as well. Chinese investors may choose to defer their investments until they have better clarity. Watch this space for more updates.
Also read: MG Hector Plus Spied
Source: The Telegraph
Story: Joshua Varghese
