Indian automaker Mahindra and China’s Shaanxi Automobile Group are planning to establish a $3 billion joint venture to build a car manufacturing plant in India. The majority stake in the venture will be owned by Mahindra, with the proposed plant to be set up in Prime Minister Narendra Modi’s home state of Gujarat.
Although Mahindra denied the report in a stock exchange statement, its shares rose on the Bombay Stock Exchange following the news. The proposed manufacturing hub will focus on assembled cars, engines, and car batteries for exports.
As India requires government approval for Chinese investments, Mahindra has sought clearance for this partnership. The move comes amid India’s efforts to attract foreign investments and ease restrictions on Chinese investment in non-sensitive sectors such as solar panels and battery manufacturing.
While past Chinese investment proposals have faced delays due to security concerns, Indian officials are now considering promoting foreign direct investment from China. The potential partnership signals a shift in India’s approach towards Chinese investments as the country aims to boost exports and attract much-needed investments.
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