Chinese cars in India: what is sold, what is blocked, and why
Facts checked
India is the one large Asian market that restricts Chinese carmakers by law rather than by tariff alone. Press Note 3 of 2020, issued by the Department for Promotion of Industry and Internal Trade on 17 April 2020, required prior government approval for any foreign direct investment from a country sharing a land border with India: China, including Hong Kong and Macau, plus Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan. It was introduced during border tensions and amid concern about opportunistic acquisitions during the pandemic, and it applied to greenfield plants as much as to takeovers.
The practical effect on the car industry was immediate. Great Wall Motor agreed to buy General Motors' Talegaon plant, could not obtain approval and abandoned its Indian plans in 2022. BYD's proposal to invest about US$1 billion in a plant with the Hyderabad group Megha Engineering and Infrastructures was rejected in 2023 on security grounds. BYD still sells cars in India, but as a small importer paying full duty on built-up vehicles rather than as a manufacturer. SAIC restructured instead: MG Motor India became a joint venture with India's JSW Group announced in November 2023, with JSW taking 35 per cent, SAIC reduced to 49 per cent, an Indian fund at 8 per cent, employees at 5 per cent and a dealer trust at 3 per cent. The Competition Commission of India cleared JSW acquiring up to 38 per cent in January 2024. MG builds at Halol in Gujarat, a former General Motors plant, with capacity of about 80,000 vehicles a year.
The rule has since been softened, not removed. The Union Cabinet approved amendments on 10 March 2026, and DPIIT issued Press Note 2 of 2026 on 15 March 2026 allowing investors from land-border countries to take up to 10 per cent beneficial ownership without control through the automatic route, subject to sectoral caps and with reporting to DPIIT; the change takes effect from the date of the corresponding notification under the Foreign Exchange Management Act. Anything above 10 per cent, or any investment carrying control, still needs government approval.
At a glance
| Country code | IN |
|---|---|
| Region | Asia-Pacific |
| Market status | Restricted |
| Brands recorded | 3 |
| Chinese-owned plants | 1 |
| Models on this site | 5 |
Brands sold in India
| Brand | Status | Since | Route to market | Note |
|---|---|---|---|---|
| 名爵MG | Sold | 2019 | A joint venture | MG Motor India was established in 2017 and began sales and manufacturing in 2019. Since November 2023 it has operated as JSW MG Motor India, with SAIC at 49 per cent and JSW Group at 35 per cent. |
| 比亚迪BYD | Sold | 2021 | An independent importer | BYD sells a small range in India as an importer paying full duty on built-up vehicles, after its proposal to build a plant was rejected in 2023. Entry year to be re-checked against a primary source. |
| 长城GWM | Withdrawn | not published | The company itself | Great Wall Motor announced Indian plans and agreed to buy General Motors' Talegaon plant, could not obtain the approval required under Press Note 3 and abandoned the plan in 2022. |
The rules
Stated from the document that issued them, with the date each was read. Nothing here is an interpretation.
| Rule | What it says | As of | Source |
|---|---|---|---|
| Press Note 3 of 2020: prior approval for investment from land-border countries | The Department for Promotion of Industry and Internal Trade issued Press Note 3 of 2020 on 17 April 2020. It requires prior government approval for foreign direct investment by an entity of a country that shares a land border with India, or where the beneficial owner of an investment is situated in or is a citizen of such a country. The countries covered are China (including Hong Kong and Macau), Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan. Transfers of ownership that result in such beneficial ownership also require approval. | Press Information Bureau, Government of India | |
| Press Note 2 of 2026: partial relaxation | The Union Cabinet approved amendments to the land-border investment rules on 10 March 2026 and DPIIT issued Press Note 2 of 2026 on 15 March 2026. Investors from land-border countries may hold up to 10 per cent beneficial ownership without exercising control through the automatic route, subject to sectoral caps, with the Indian investee company required to report the investment to DPIIT. The change takes effect from the date of the corresponding notification under the Foreign Exchange Management Act. Holdings above 10 per cent, and any investment carrying control, still require government approval. | Business Standard | |
| BYD manufacturing proposal rejected | The Indian government rejected BYD's proposal to invest about US$1 billion in a manufacturing plant with the Hyderabad group Megha Engineering and Infrastructures in 2023, on national security grounds. | South China Morning Post |
Chinese-owned plants in India
| Owner | Location | Since | Note |
|---|---|---|---|
| SAIC Motor | Halol, Gujarat | 2019 | The former General Motors India plant, with capacity of about 80,000 vehicles a year and reported investment of over 20 billion rupees. Now operated by JSW MG Motor India, in which SAIC holds 49 per cent. |
Models recorded in India
| Model | Body | Status | Range |
|---|---|---|---|
| IM Motors IM6 | SUV | Announced | 450 km WLTP |
| Maxus Maxus Mifa 9 | MPV | Sold | 540 km NEDC |
| MG MG Cyberster | Coupé | Sold | 507 km WLTP |
| MG MG ZS | Crossover | Sold | 263 km WLTP |
| Wuling Wuling Air ev | Hatchback | Sold | not published |
Chinese cars in India: questions people ask
- Can Chinese carmakers invest in India?
- Only with government approval. Press Note 3 of 2020 requires prior approval for any investment from a country sharing a land border with India. Press Note 2 of 2026 allows non-controlling stakes of up to 10 per cent through the automatic route, but anything larger or carrying control still needs approval.
- Why is MG Motor India not fully Chinese-owned?
- SAIC restructured MG Motor India into a joint venture with India's JSW Group announced in November 2023. JSW took 35 per cent, SAIC's holding fell to 49 per cent, and the balance is held by an Indian fund, employees and a dealer trust. The Competition Commission of India cleared JSW acquiring up to 38 per cent in January 2024.
- Does BYD sell cars in India?
- Yes, but as a small importer. BYD's proposal for a plant worth about US$1 billion with Megha Engineering and Infrastructures was rejected in 2023 on security grounds, so its Indian cars come in as fully built imports paying full duty.
- Why did Great Wall Motor leave India?
- Great Wall agreed to buy General Motors' Talegaon plant but could not obtain the approval required under Press Note 3 of 2020, and it abandoned its Indian plans in 2022.
What changed
The only dated surface on this page. It records status changes, not news.
-
DPIIT issued Press Note 2 of 2026, allowing non-controlling stakes of up to 10 per cent through the automatic route.
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The Union Cabinet approved amendments easing the land-border investment approval requirement.
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The Competition Commission of India approved JSW Group acquiring up to 38 per cent of MG Motor India.
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SAIC and JSW Group announced the JSW MG Motor India joint venture, cutting SAIC to 49 per cent.
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India rejected BYD's proposal for a US$1 billion plant with Megha Engineering and Infrastructures on security grounds.
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Great Wall Motor abandoned its Indian plans after failing to obtain approval to buy General Motors' Talegaon plant.
-
DPIIT issued Press Note 3 of 2020, requiring prior government approval for investment from countries sharing a land border with India.
Related
Sources for India
- Press Information Bureau, Government of India, Investment from land border sharing countries. Read . Government statement on the Press Note 3 (2020) approval requirement.
- Business Standard, DPIIT amends 'Press Note 3' to ease FDI norms for border countries. Read . Press Note 2 of 2026 issued 15 March 2026 after Cabinet approval on 10 March 2026.
- Carnegie Endowment for International Peace, India's Press Note 3 gamble: opening the FDI door to China. Read . Background on the 2020 rule and its effect on Chinese investment, including the automotive cases.
- South China Morning Post, India rejects BYD's US$1 billion EV plant on security grounds. Read .
- Wikipedia, JSW MG Motor India. Read . Used as a finding aid for the shareholding split, the Halol plant history and its capacity.
- Business Today, CCI approves JSW Group's acquisition of up to 38% in MG Motor India. Read .
- Chandhiok & Mahajan, Press Note 2 of 2026 released: relaxation for investments from land bordering countries. Read .