[shortbread]

Originally Posted by V.Narayan

In a capital short, unemployment long economy like ours we should encourage investments and job creation. It isn't as if we top the global charts in FDI and every one is beating a path to our door. Fact is as any businessman will tell you the paperwork and inspector raj has increased in the last 9 years instead of decreasing. Unemployment runs at ~8% in India and the range is from 37% in Haryana to mid-single digits in some States. If we can import such vast quantities from China each year, then why get so fussy and confusingly intellectual about FDI and job creation.

Choking Chinese access to the Indian market is the biggest card trick we have.... by far. There is nothing else that we can use to really wind up our northern headache, apart from completely aligning with the West and having a Nato base staring at China. The latter is pure conjunction and Indian diplomacy has never been stupid enough to put all the eggs in one basket. The Indian market is our carrot and stick when it comes to dealing with China, that is until we reach a stage where our economy grows at least half as large as theirs.

We have regularly been among the top 3-4 when it comes to attracting FDIs and have been showing consistent improvements in ease of business rankings. 2019 we are at 62 out of 190 odd countries, vis a vis 130 back in 2015 or 16. Also one of the world's investment/industrial hotspots right now Vietnam ranks well below us, this is just to show that investors are ready for the grind as long as the returns are there. Plus if you ask businessmen what is the biggest headache they face, then they're most likely to utter the letters GST. Taxation is a necessary evil.

Our automotive production capacity is in excess currently and apart from half a dozen or so makers, the rest are bleeding money. So in my opinion if we are looking to add another player into this crowded market then they need to fulfil atleast one of the following two criteria's, 1) Source from largely local suppliers OR 2) grow the market by pushing for exports. The Chinese will do neither. Just look at their BRI schemes in our neighbourhood, they come in as investors and simply end up being loan sharks. When it comes to Chinese investments, the flower always blossoms on the other side of the fence.

[outdoorlover]

The story of how BYD pivoted quickly and dramatically from making problem riddled, not so reliable ICE based cars to the world's #1 EV car manufacturer is incredible! I have fist experience with their ICE car that a friend had bought and had difficulty in selling wiithin a year because of its never ending issues.

Cut to today's date, their battery tech is one of the most advanced so much so that even Tesla buys their Blade batteries for some export markets. Amazing story of a turnaround it is, for which we should credit the company.

I have no clue as to how much they are government controlled or owned though. I hope our think tanks have some ideas on getting critical components like batteries and motors developed and manufactured in India as until now, we only have been importing from China irrespective of which brand of car it is in India. Tata has had a headstart in India due to its early adoption of EV tech and also its deep access to the Chinese supply chain due to its Jaguar- Land Rover operations in China.

[rrsteer]

I think we should encourage this investment. On the balance, India gains than loses. Apart from the investment triggers across the value chain and job creation, it will also raise the level of competition and thus innovation levels in the market, which itself can trigger an investment cycle.

OT: Was just spending some time understanding the renewable energy market in Australia. Huge potential for large scale RE projects, welcoming state and federal govt. policies, lot of investment focus from players across the globe (esp. Japan and EU), hundreds of projects announced, but in the past year or so just one large scale project took off! What happened? One of the factors at play is Australia blocking Chinese investments, and China retaliating by blocking the supply chain. So you need tower cranes to erect those wind mills, the wind turbines, and all sorts of myriad things. Lots of those originate from China and they discretely block/delay those, in turn causing delays and wreaking havoc with project finances.

[FiatDiesel]

Well I support investments in Indian manufacturing by China. If we talk about automotive sector, they were the first to bring in: -

1. Feature rich with "Internet Inside" Hector.
2. L1 and L2 ADAS in Gloster --> Astor --> Hector --> ZS EV
3. Quality & long-range EV (ZS EV).

Koreans, Japanese, Americans - none of them cared to bring in their best & latest technology to India till the time MG triggered the competition.

For us as a country, not only just for jobs, but it is also very important to support competition that's what Maruti, Xiaomi, Samsung, LG did in their respective sectors when they had setup their shops in India.

It forces our industrialists / businesses to improve not only quality but offer more for less.Else we as citizens are cash cows for obsolete tech with no access to latest unless its imported.

Please note that they indirectly groom our country workforce who work in their factories on latest technology, productive work culture & quality outputs which have been traditionally grey areas of our home-grown companies.

[PreludeSH]

I support investment from anyone in our country. But with this investment, how much more eventually goes back to China ? They need more returns.

Even Germany is now talking to their companies about the risks of dependence on china and is interested to ween them away. India, as long as we have our systems that only inhibit any new venture cannot gain from all these things.

If you take telecom for example, even the Indian operators are forcing their vendors to source equipment from India. Such things where we are at an advantage and can dictate should foster more manufacturing investment.

[Quoter]

Originally Posted by V.Narayan

There is no denying the geo-political issues and China's duplicity. As a dyed in wool Indian I am as peeved as you are. What then is your proposed action on our trade deficit of $64,500 million {~INR 528,000 crores}. As I wrote in my post number #6 if we are getting so anal and indulging in faux nationalism over an investment in factories and jobs why are we consuming Chinese products. Chinese imports are so ubiquitous that none of us can state that we do not have a single Chinese product. So much of what we buy are intermediate goods that go into finished products. Every car manufactured in India has intermediate stage raw materials from China. Let's get real here and not get jingoistic.

No Jingoism - only self interest as a nation is what we need to look at.

With regards to the particular investment, if BYD is willing to set up a research and export unit in India, I see no reason why they should be disallowed. However, a unit meant for only assembling parts partly imported from China adds no value to us as a country.

As to the overall trade balance, there are already steps being taken. These include actively encouraging new set ups through PLI schemes, actively discouraging imports through regulations such as for car tyres etc. And then there are also clear laws such as those for FDI in retail which require 25% domestic contribution. And these things are working. Recently I was at an IKEA store in Europe and was happy to see a few Made in India products among a sea of Made in PRC.
We are a vast country which is 2 decades behind China in most areas. Change will take time but it is happening for sure. Maybe in a few years it will reach the tipping point when it becomes visible in everyday life as well.

[sandeepmdas]

In regards to this specific case, the local partner chosen by BYD is a relatively small player. If we use colonial terms it is not even a vassal, Megha can only be termed as a puppet of BYD. Overall, the proposal can be likened to the tiger and toad tale from the Panchatantra, where the tiger slays an elephant and the toad proudly boasts to everyone, "We killed it."

To be honest, the ministries might have felt that BYD was mocking them.

In my humble opinion, BYD should have opted for a larger business entity, such as TVS, Godrej, L&T or even Rahul Bajaj, as their involvement would have made a significant impact

[SmartCat]

Originally Posted by sandeepmdas

In regards to this specific case, the local partner chosen by BYD is a relatively small player. If we use colonial terms it is not even a vassal, Megha can only be termed as a puppet of BYD.

Megha & BYD have done well together in electric bus business, eventhough Megha is a relatively small infra company that rose from obscurity.

Olectra (BYD + Megha) closed last year with sales of Rs. 1,000 cr and profit of Rs. 70 cr. It is a listed company too, and valued at Rs. 10,000 cr.
https://www.screener.in/company/OLECTRA/consolidated/
Website: https://olectra.com/



Even if Govt shoots down the BYD FDI offer, they will probably take a backdoor entry into India with their existing partner or a new partner who has no trouble raising cash. Adanis perhaps!

[srini1785]

Yet another thread in which the magic word "China" creates a bipartisan free for all with valid points from both parties which will only end in a stalemate. I will only say that with the current trade deficit and given that chinese companies are more or less controlled by the state, its a prudent decision by the present disposition to block any such investment move. Take a look at all those countries (Africa to our western neighbor) where riots have broken out due to the BRI policy of China. None of the workers were Local, nor was the machinery. I totally don't buy that China would locally source. At best it would be a CKD kind of deal.

"Internet inside" has only further spooked the GOI so I am all for such move.

[sandeepmdas]

Originally Posted by SmartCat

Megha & BYD have done well together in electric bus business, eventhough Megha is a relatively small infra company that rose from obscurity.

I know (but I also know that you know a lot more than I) and in fact I do own some stock. And I also rode their bus in Goa last month because it's "Namma bus" since I'm a stockholder. Just a check ride. Excellent.

However, the point is that their excellent corporate performance may attract both envy and suspicion. Not from me the humble stock holder, but from concerned parties.

Ref. their backdoor entry, I think BYD will wait till next LS poll outcome.

[outdoorlover]

Originally Posted by SmartCat

Megha & BYD have done well together in electric bus business, eventhough Megha is a relatively small infra company that rose from obscurity.

l:

I think in the electric bus industry, we have hobson's choice with the market leader JBM (Jai Bharat Motors) sourcing all critical components including battery and motor from China and on the other side we have BYD-Megha. So its China vs Chinese proxy.

[Hayek]

Quite brainless to block FDI from anywhere. I can understand restrictions on Chinese investment in certain technology sectors such as prohibiting Huawei’s 5G technology or restricting the use of Chinese equipment for even 4G masts in places near the border. But cars ARE NOT STRATEGIC products - they are long lasting consumer goods and it does not matter whom we buy our cars from. I may personally be reluctant to buy a Chinese car when a non Chinese equivalent is available - but the government stopping Chinese FDI prevents job creation in India and imposed higher costs on Indian consumers. Hope we don’t go down this path - which is a road to perdition - and will at a stretch take us back to the Ambassador and Padmini era .

[shankar.balan]

This is a just a jingoistic and short-sighted move to get some eyeballs and those ‘jingo votes’. An EV, like a Fridge or Washing Machine is merely part of the vast arrray of ‘White Goods’ that consumers use in their daily lives. Ref Connected Technology and Covered Telecommunications etc I can appreciate the stance of GOI.

[Acharya]

Evidently border tensions are manifesting on multiple fronts. It could be another way of telling China to mend it's ways, towards our nation.

Getting a China Visa is trickier by the day, I know of five employees in my org who have seen Visa rejection (which is almost 50% rejection in 2 quarters). I hear India is doing the same for Chinese seeking Indian Visa.

On one hand I completely agree that incoming FDI is always good, however there is little public information about the full story being played in diplomatic circles. Which is possibly leading to irrational appearing decision.

[Kkumar]

FDI irrespective of whichever country it is from should be received with open hand. Once large amount of Chinese money gets tied up in our economy it will be also in Chinese interest to ensure smooth diplomatic ties to protect their investment which in turn will bring peace to our borders. With BYD being a market leader in EV battery technology we will only learn more from them which will help us to improve our technology and become self reliant in future.