SAIC Scales Back in India as Chinese Firms Reassess Exposure
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The MG Hector sports utility vehicle (SUV) stands on display during the vehicle's launch at the Morris Garages flagship showroom in Gurugram, Haryana, India, on June 27, 2019. Photo: Bloomberg..
SAIC Motor Corp., one of China’s largest carmakers, is scaling back its ambitions in India, handing over more control of its operations to its local partner as political and regulatory pressures mount.
The strategic retreat comes despite the growing promise of India’s electric vehicle (EV) market.
An industry insider told Caixin that SAIC decided to pare back its investment in India due to increasingly complex bilateral relations. Despite India’s rapidly expanding new energy vehicle sector, the risks of doing business have grown too burdensome for the Chinese car giant.
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- SAIC Motor is reducing investment and ceding control in its Indian unit to JSW Group, reflecting broader Chinese company retreats amid political and regulatory pressures since 2020.
- Chinese firms including Vivo and Haier are forming joint ventures or selling stakes to Indian partners, using asset-light and export-only strategies to mitigate risk and regulatory scrutiny.
- Despite India being the world’s third-largest EV market in 2023 and strong demand, repatriating profits remains difficult and business sentiment is subdued.
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Who’s Who
- SAIC Motor Corp.
- SAIC Motor Corp., a major Chinese carmaker, is reducing its presence in India due to political and regulatory pressures. It's handing over more control to its local partner, JSW Group, in their joint venture, JSW MG Motor India. Despite India's growing EV market, SAIC is not injecting new capital, reflecting a broader trend of Chinese companies scaling back operations in India.
- Vivo
- In a strategy to manage increasing regulatory difficulty in India, Vivo, a Chinese smartphone manufacturer, established a joint venture with Dixon Technologies in late 2024. Under this new agreement, Dixon Technologies holds a 51% stake and oversees the manufacturing operations for Vivo devices in India. This move allows Vivo to mitigate risks while maintaining its presence in the Indian market.
- Haier
- Haier, a Chinese appliance manufacturer, is reportedly in discussions to sell a 49% stake in its Indian subsidiary to Sunil Mittal, founder of Bharti Airtel. This follows the Indian government's rejection of Haier's **$1.2 billion investment proposal** in 2023, which has compelled the company to use retained earnings and loans for its expansion efforts. This move reflects a broader trend among Chinese companies in India to cede control to local partners amid increased scrutiny.
- Xiaomi Corp.
- Xiaomi Corp. is a Chinese smartphone brand that commands a significant share of India's market. Following border clashes in 2020, Xiaomi has faced increased regulatory scrutiny from Indian authorities, including tax evasion accusations and the seizure of substantial funds from its Indian unit.
- Huawei Technologies Co. Ltd.
- Huawei Technologies Co. Ltd. is a Chinese company that has faced intensified regulatory scrutiny in India. This scrutiny, alongside that of other Chinese companies like Xiaomi Corp. and Oppo Co. Ltd., includes investigations into tax evasion and foreign exchange violations.
- Oppo Co. Ltd.
- Oppo Co. Ltd. is a Chinese smartphone company. Along with other Chinese firms like Xiaomi and Huawei, Oppo has faced intensified regulatory scrutiny in India, including allegations of tax evasion and foreign exchange violations. This has contributed to a broader trend of Chinese companies scaling back direct investment in India due to political and regulatory pressures.
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What Happened When
- 2017：
- SAIC entered India with a wholly owned subsidiary, MG Motor India.
- 2019：
- SAIC launched its first car in India.
- 2020：
- A deadly border clash occurred, prompting New Delhi to tighten foreign direct investment scrutiny targeting Chinese companies.
- January 2022：
- India’s Directorate of Revenue Intelligence ordered Xiaomi to pay $84.5 million in import duties.
- Later in 2022：
- Indian authorities seized more than $700 million from Xiaomi’s Indian unit.
- 2023：
- India emerged as the world’s third-largest EV market.
- 2023：
- The Indian government rejected Haier’s $1.2 billion foreign investment proposal.
- By April 2024：
- SAIC restructured its India venture, bringing in JSW Group as a major stakeholder and reducing its stake to 49%.
- Late 2024：
- Vivo agreed to set up a joint venture with Dixon Technologies after Tata Group's earlier bid to acquire a 51% stake failed.
- October 2024：
- A meeting between Chinese and Indian leaders occurred at the BRICS summit.
- As of 2025：
- Business sentiment between China and India remains subdued despite some diplomatic thaw.
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