Centre rejected BYD proposal to block Telangana progress, says REDCO chairman

The Unit was proposed to be set up with Rs 8,000 crore investment with a target of manufacturing of 10,000 to 15,000 electric vehicles annually. 

Hyderabad: The BJP-led union government’s denial of permission to Chinese-based BYD (Build Your Dreams) to set up an EV and battery manufacturing plant in Telangana, citing security concerns, appears to have much more to it than meets the eye.

BYD along with another Hyderabad-based private company had proposed to set up the plant with an investment of $1 billion in Telangana. After an application was filed, the Department for Promotion of Industry and Internal Trade (DPIIT) sought opinion from other departments on the proposal. According to reports, permission was denied citing security concerns besides stating that existing rules do not permit such investments.

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Interestingly, BYD has been operating in India and selling fully-electric cars for long. This apart, the company is also planning to launch its SUV in India by the end of this year. Apart from electric cars, BYD has been involved in production of electronic parts, batteries and mobiles at Oragadam, Tamil Nadu since 2007. The company, from 2016, was also supplying batteries and bus chassis from its assembling unit at Sriperumbudur near Chennai to another company involved in sale of electric buses. It also has a unit for manufacturing components used for mobiles in Tamil Nadu.

That is not all. There are several other prominent Chinese companies already operating in diverse fields in India. According to information from the website of Invest India, the national investment promotion and facilitation agency, these include Oppo, Vivo, Fosun International, Midea, SAIC and Haier.

Of these, Haier has a manufacturing facility in Pune and is planning another in Noida. SAIC, which manufactures and sells passenger and commercial vehicles, took over the General Motors factory in Gujarat. Home appliance, robotics and automatic systems manufacturer Midea’s Indian facility is in Maharashtra, while smartphone maker Vivo Electronics has an assembly line in Noida, Uttar Pradesh. Smartphone maker Oppo is setting up a manufacturing base for electronic components in Noida, while healthcare company Fosun too has a manufacturing facility in the country.

When security was not a factor in permitting these companies, denial of permission to the BYD plant in Telangana smacked of discrimination, according to TSREDCO Chairman Y Satish Reddy, who says the Centre, after creating hurdles in Telangana’s development and discriminating in sanctioning funds and projects, was now blocking investments into the State.

Denial of permission to BYD has led to assumptions that the Centre was doing this because the plant was proposed in Hyderabad and not in Gujarat, he said.

“The BYD unit would not only aid in increasing electric vehicles production in the country but would also generate employment to local youth. Considering all these factors, the Centre should approve the BYD application,” Satish Reddy said, pointing out that import of electric vehicles escalating the vehicle cost. If EVs were manufactured in the country, it would cut down the costs.

“As it is, the Centre has denied incentives for electric vehicles. This is in addition to imposing GST on solar panels and import duties as well,” he said, adding that the growth of the EV sector would be hit hard with the Centre’s biased approach.