Indian automobile giant Mahindra & Mahindra has partnered with China’s Shaanxi Automobile Group to establish a $3 billion joint venture aimed at constructing a car manufacturing facility in India. According to sources familiar with the matter, the companies are currently awaiting approval from New Delhi to proceed with the venture.
The proposed joint venture will see Mahindra holding the majority stake. The planned manufacturing facility is expected to be located in Gujarat, the home state of Prime Minister Narendra Modi, as per two sources with direct knowledge of the situation.
Mahindra has reportedly requested government clearance for the involvement of Chinese investment in the project. However, Mahindra has declined to comment on the matter. Attempts to reach Shaanxi via phone calls and faxes listed on the company’s website went unanswered.
Additionally, India’s Ministries of Commerce, Heavy Industries, and Foreign Affairs have not responded to requests for comments. The government sources, who spoke on the condition of anonymity due to restrictions on speaking to the media, revealed that the approval process is still underway.
This development comes in the wake of a $1 billion investment proposal by Chinese company BYD last year, which was halted by the Indian government due to security concerns. Recently, top Indian officials have indicated a potential review of their stance on Chinese investments, especially as foreign investments have dropped to a 17-year low.
India’s Finance Minister Nirmala Sitharaman recently expressed support for Chief Economic Adviser V Anantha Nageswaran’s views, who suggested that India could encourage foreign direct investment from China to bolster the country’s export sector.
