NEW DELHI — Indian automaker Mahindra & Mahindra and China’s Shaanxi Car Group have agreed to arrange a $3 billion three way partnership to construct a automotive manufacturing plant in India and are awaiting New Delhi’s approval, sources advised Reuters.
A majority stake within the proposed manufacturing enterprise will probably be owned by Mahindra, two sources with direct data of the matter advised Reuters, and is proposed to be arrange in Prime Minister Narendra Modi’s residence state of Gujarat.
In a inventory alternate assertion after the report was printed, Mahindra stated: “The article is unfounded and there’s no fact within the matter.”
Shares of Mahindra rose as a lot as 3.1% earlier than settling 2.5% larger at 2,749.15 rupees on the Bombay Inventory Change on Friday.
The proposal contains constructing an export-oriented, built-in manufacture hub for assembled vehicles in addition to engines and automotive batteries, the sources stated.
Mahindra has sought a authorities nod for the Chinese language funding, the sources stated.
Faxes and calls to Shaanxi’s cellphone numbers listed on the corporate’s web site weren’t answered. India’s commerce, heavy industries and overseas affairs ministries didn’t instantly reply to a request for remark.
The sources didn’t wish to be named as they aren’t allowed to talk to media.
Indian authorities approval has been mandatory for any Chinese language funding into the nation since 2020, when New Delhi tightened its restrictions on Chinese language funding after lethal border clashes between the 2 neighbours.
Billions of {dollars} value of investments have through the years both been delayed or canceled attributable to India’s further vetting processes for the likes of BYD Co Ltd, Nice Wall Motor and SAIC’s MG Motor.
A proposal value $1 billion by BYD final yr has been held by the federal government on safety considerations.
Nevertheless the funding proposal comes at a time when India is trying to ease restrictions on Chinese language funding in non-sensitive sectors like photo voltaic panels and battery manufacturing, the place New Delhi lacks experience.
India’s prime authorities officers have these days been hinting at reviewing their stance towards Chinese language funding as overseas investments fell to 17-year lows.
India Finance Minister Nirmala Sitharaman final month stated she supported the views of her Chief Financial Adviser V Anantha Nageswaran, who just lately stated New Delhi might promote overseas direct funding from China to spice up India’s exports.
(Further reporting by Krishn Kaushik in New Delhi and Qiaoyi Li in Beijing; Modifying by David Holmes)