The Indo-China border tensions have had a significant impact on business between the two countries. In the short term, the tensions have led to a slowdown in trade and investment.
Recently, Chinese EV maker BYD (Build Your Dreams) proposed a $1 billion investment for building electric cars in India. However, the move faced scrutiny and was rejected by the central government. Prior to this, China’s Great Wall Motors met a similar fate as their proposal of a $1 billion outlay was scrapped by the centre.
That aside, BYD now, reportedly is facing charges for paying too little tax for the cars it ships in India. At present, the OEM brings EVs in India via the CKD (Completely Knocked Down) route and assembles them at their plant in Sriperumbudur plant near Chennai.
As per the report, India’s Directorate of Revenue Intelligence (DRI) has accused China’s biggest manufacturer of underpaying taxes by $9 million. While it is said that the EV maker has already deposited the amount based on the DRI’s preliminary findings, the investigation is still on, and the carmaker might see further tax charges and penalties being imposed.
The DRI has not yet issued a final notice to BYD, allowing them an opportunity to challenge the findings.
BYD has been rapidly expanding its footprint in India and has commenced the deliveries of the Atto 3 electric SUV, the first batch of which was rolled out in January 2023.
The neighbours, having experienced trade downfall recently, has also seen the latter’s investment on our shores getting impacted.
China is India’s largest trading partner. Following a record growth for two successive years, India’s trade with its northern neighbour slumped significantly in the first half of 2023. As per the data from China’s General Administration of Customs (GAC), India’s imports and exports from China slid substantially at 0.9 percent and 0.6 percent, respectively.
While the government has put Chinese investments under the microscope due to security concerns, it remains to be seen how this saga will unfold and if the OEM will be able to accomplish its target of grabbing a healthy 10-15 percent share of the Indian EV market by 2030.
