BYD Plans India Push as Diplomatic Reset Opens Doors
Chinese electric vehicle maker BYD is preparing to renew its India operations after years of limited activity. The move follows an easing in diplomatic tensions between New Delhi and Beijing, with the company’s top executives set to travel to India for the first time since 2020.
Return of Senior Leadership
BYD India's Managing Director Ketsu Zhang is expected to visit in the coming months, marking his first trip since the Ladakh border crisis effectively froze Chinese business activity five years ago.
His visit will include meetings with government officials in New Delhi and a review of the company’s assembly facility in Tamil Nadu. The plant has been operating on limited oversight, with management carried out remotely during the years of restricted travel.
India’s decision to restore business visas for Chinese executives, along with the resumption of direct flights, has created conditions for companies like BYD to re-engage with their Indian operations. For BYD, this marks a chance to regain lost ground in one of the world’s fastest-growing auto markets.
New Models and Market Competition
The company is reportedly considering launching the Atto 2, a compact electric SUV, early next year. Priced below Rs 20 lakh despite a steep 70 percent import duty, the model is aimed at the mass market and will compete directly with homegrown players Tata Motors and Mahindra & Mahindra.
BYD is currently the fourth-largest EV brand in India, with a line-up that includes the Atto 3 SUV. However, its sales have been capped by India’s import limit of 2,500 vehicles per year. Expanding import quotas or securing permission for local manufacturing would be key to scaling up further.
Local Partnerships on the Table
Beyond imports, BYD is exploring longer-term options in India. The company is assessing battery pack assembly and has held early discussions with the Adani Group about lithium-ion battery manufacturing. Such partnerships could help BYD qualify for local manufacturing incentives, improve cost competitiveness, and reduce dependence on imports.
Diplomatic improvements between India and China are also shaping the backdrop for these moves. Both countries face pressure from US tariffs and share concerns about supply chain security. This has opened limited space for business cooperation even as political tensions continue over the border.
Challenges Ahead
BYD’s earlier attempts to build in India were blocked by the government in 2023, when relations were at a low point. The current thaw offers a new opportunity, but success will depend on whether the government is more receptive this time.
The company also faces entrenched competition. Tata Motors and Mahindra have developed EVs tailored to Indian conditions, built at scale with local supply chains, and priced competitively. For BYD, matching this combination of localisation and affordability will be critical.
We think BYD’s India strategy is a test case for how Chinese companies can re-enter the Indian market after years of restrictions. If successful, it could pave the way for other Chinese manufacturers to follow. If it falters, it may confirm the limits of diplomatic progress in reshaping business opportunities.