China's Great Wall Motor shelves $1 billion India plan, fires all employees

Chinese automaker Great Wall Motor has been planning to enter the Indian market since 2020 but now becomes one of the biggest casualties of New Delhi's increased scrutiny of investments from Beijing.

China's Great Wall Motor has shelved plans to invest $1 billion in India and laid off all employees at its operations after failing to obtain regulatory approvals, three sources with direct knowledge of the matter said on Friday.

The Chinese automaker has been planning to enter the Indian market since 2020 but now becomes one of the biggest casualties of New Delhi's increased scrutiny of investments from Beijing.

Without directly commenting on the exit, a Great Wall statement said the company "would like to thank all the members of Indian team for their contribution", adding that it would continue to study the Indian market and look for opportunities in the future.

Great Wall's India entry plan was announced with great fanfare during the country's biennial auto show in January 2020. India was a key market for the Chinese SUV manufacturer's global expansion plans and the company had envisioned a plant that would be its biggest outside China.

Months later, after Great Motor began hiring staff in India, New Delhi increased scrutiny of investments from countries with which it shares a land border to deter opportunistic takeovers during the COVID-19 pandemic.

The crackdown deepened after a border clash between India and China later that year, which has since held up billions of dollars of capital inflow in the auto and technology sectors among others.

The sources, who declined to be named, said that Great Wall laid off about a dozen employees at its Indian business on Friday after telling them it had failed to obtain foreign direct investment approval from the government to buy a former General Motors (GM) plant in the country.