The Maharashtra government has shelved Great Wall Motors’ (GWM) plan to enter the Indian markets. The Chinese auto company, known for its SUVs had signed an agreement to take over General Motors’ plant in Talegaon, in Maharashtra, in January this year.
The decision to put Maharashtra’s agreement with GWM on hold comes at a time when the face-off between Indian and Chinese forces in Galwan Valley has sparked an anti-Chinese sentiment among Indian consumers.
GWM’s investment in India is one of the three projects in Maharashtra that have been put on hold. Maharashtra’s minister of industries, however, mentioned the projects have not been cancelled yet. The state government is awaiting clarity on polices from the central government regarding investments by Chinese companies.
In April, India amended its foreign investment policy barring investments from bordering countries, including China, without official clearance. These changes were said to have been made to avoid opportunistic takeovers of distressed businesses.
Meanwhile, the European Commission has also opened a process last week which could restrict Chinese government-backed companies from operating in the EU. The Commission believes European companies in China do not receive similar levels of transparency and fair competition as Chinese companies in European countries do.