Despite a ban on direct entry, Chinese automakers are using EV technology to access India, the world's third-largest auto market.
According to Reuters, India tightened control over Chinese companies after a border clash in 2020 that resulted in casualties on both sides. Tensions persist despite efforts to improve relations.
Santosh Pay, partner at law firm Dentons Link Legal, said: "If India wants to expand its manufacturing sector and become a bigger part of the global supply chain, partnership with China is inevitable. Chinese companies cannot ignore India's economic potential if they aim to be global leaders."
India's third-largest automaker, Tata, is using the Chinese Chery platform to accelerate EV launches. The company plans to eventually replace Chinese imports with locally developed components, a move welcomed by some Indian politicians.
A senior Indian official stated that the government supports agreements boosting local production or diversifying supply chains. For Chinese automakers facing slowing domestic growth and overcapacity, such deals offer a way to increase revenues without violating export restrictions.
China's advanced EV industry will continue to penetrate the vast Indian market. This is negative news for Japanese automakers and other companies heavily invested in India, as they currently face little competition from Chinese rivals.
