BYD India Expansion Faces Challenges Amid Strained Sino-Indian Relations, ETAuto

Tesla faces import duties as high as 110 per cent but has thus far avoided the regulatory and political entanglements stalling BYD’s progress.Chinese electric vehicle (EV) giant BYD Co. is facing mounting hurdles in its attempts to expand operations in India, with lingering political tensions and regulatory bottlenecks stalling key business activities, including executive travel and local investments, Bloomberg reports.

Since the deadly 2020 border clash between Indian and Chinese soldiers along the Himalayan frontier, relations between the two nations have soured. As a result, Chinese firms such as BYD have struggled to secure visas and work permits for senior personnel. Ketsu Zhang, Managing Director of BYD India, has reportedly been unable to obtain a work permit to return to the company’s base in Chennai. Zhang has been operating from Tokyo, managing BYD’s interests in Asia, including India, according to sources familiar with the matter.

With direct operations in India hampered, BYD has resorted to holding board meetings and key business discussions in neutral territories such as Sri Lanka, Nepal, and even Singapore, sources said.

Despite the logistical challenges, BYD’s vehicles have seen growing traction among Indian buyers. Sales in the first half of 2025 are already nearing the total for all of 2024. However, the company’s expansion is limited by its inability to invest locally. The Indian government earlier rejected BYD’s $1 billion proposal to establish a joint venture manufacturing plant in India, citing national security concerns.Commerce Minister Piyush Goyal reiterated earlier this year that the Indian government remains cautious about Chinese investments in sensitive sectors, including automotive manufacturing. This stance leaves BYD ineligible for any import tariff concessions tied to local production.

Currently, BYD operates an assembly facility in Chennai with an annual capacity of 10,000 to 15,000 units. However, the bulk of its vehicles are imported — making them subject to steep tariffs that can double their cost — and are constrained by local certification and volume restrictions.

Earlier this year, an Indian delegation invited to a major BYD dealer conference in Shenzhen had to be reduced after most participants failed to secure travel visas. BYD India declined to comment on these developments.

The contrast with US-based Tesla is striking. Tesla recently launched physical showrooms in India and began accepting orders for its Model Y SUV, despite also lacking local manufacturing. Chief Executive Elon Musk met with Prime Minister Narendra Modi last year, indicating a smoother diplomatic engagement.

Tesla faces import duties as high as 110 per cent but has thus far avoided the regulatory and political entanglements stalling BYD’s progress.

India recently resumed issuing tourist visas to Chinese nationals, signalling a slight thaw in relations. Still, it remains unclear whether broader business-related visa restrictions will be eased or if BYD will be granted a green light to fully tap into one of the world’s fastest-growing EV markets.

For BYD — which aims to sell 5.5 million vehicles globally this year amid cooling domestic demand in China — access to India remains critical. Yet without local manufacturing capabilities and full market entry, the company faces significant limitations in its South Asian growth strategy.

• Published On Jul 28, 2025 at 12:24 PM IST

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