Chinese automakers may not be allowed to enter the Indian market freely, but their electric vehicle (EV) technology is slowly making its way into India. Despite political tensions between New Delhi and Beijing, cooperation in the automobile sector is increasing. Recently, Tata Motors announced that it will use a vehicle platform developed by Chinese automaker Chery to manufacture its premium electric vehicles in India. Both companies clarified that the agreement is only a supply arrangement and does not involve any ownership stake or technology transfer(ToT).
India increased restrictions on Chinese businesses after a deadly border clash in 2020 that resulted in casualties on both sides. Although relations between New Delhi and Beijing have improved in recent years, some concerns still remain. Experts believe that cooperation between the two countries is important for economic growth. According to Santosh Pai, a partner at Dentons Link Legal, India needs partnerships with China to expand manufacturing and strengthen its position in global supply chains.
For Tata Motors, using Chery’s platform offers a faster, more cost-effective way to launch new electric vehicles. Tata also plans to gradually reduce its dependence on imported Chinese kits and increase local component production in India. This approach is viewed positively by Indian policymakers because it supports domestic manufacturing and job creation. A senior Indian government official said the government supports partnerships that ultimately lead to increased local production and supply chain development within India. Also, this aligns with Tata Motors’ ambition to double its revenue by fiscal 2031.
Meanwhile, Chinese carmakers are facing slowing demand and excess manufacturing capacity in their home market. Partnerships with Indian companies could help them generate additional revenue while complying with China’s restrictions on exporting advanced technology. Tata Motors and Chery did not comment further on the matter.
