Great Wall Motors India Entry Timeline To Depend On Govt Nod

Great Wall Motors Pickup Truck — The Chinese automaker is awaiting government clearance to enter India

Great Wall Motors is currently awaiting government nod to make its India entry.
After the pandemic struck, the government, in April, came up with new rules, making prior government clearance mandatory for any investment from countries that share their border with India.

The Department for Promotion of Industry and Internal Trade (DPIIT) explained that such a rule would curb opportunistic takeovers or acquisitions of Indian companies due to or because of the COVID-19 crisis.

Even the automobile sector, which falls under the Foreign Direct Investment (FDI) automatic approval route, is not exempt from the regulation. Over 40 proposals with Chinese investment are said to be awaiting security clearance at the moment, including that of Great Wall Motors.

Having bought the Talegaon factory from General Motors in January for Rs. 950 crores, as part of a $1 billion (Rs. 7500 crores) India investment plan, the Chinese firm approached the DPIIT and the Competition Commission of India (CCI) so as to go ahead with its plans.

But, the proposal has to be vetted by the Ministry of Home Affairs for security clearance, which is taking time and subsequently delaying the Chinese automaker’s India entry plans.

Although the firm is hoping that the approval will come through, Great Wall Motors India entry has nevertheless been delayed by one whole quarter. Now, the firm plans to launch its India operations by June 2021.

If the approval gets further delayed, then the launch might be pushed to 2022. Further, group units of Great Wall that are looking at setting up factories in India, might face more screening as per the new FDI rules.

What’s more, this is also delaying General Motors’ plans. With the closure of its deal with Great Wall Motors not yet done, the American manufacturer has had to extend output by several weeks. It had planned to wrap things up by November this year.

Since the June border clash, India and China have not been on good terms, although talks are still ongoing. There is a strong anti-China sentiment in the country at the moment and the above mentioned new FDI rules were said to have been put in place to stop FDI coming from China.