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Great Wall Motor, other Chinese projects worth Rs 5k cr halted by Govt

Along with Great Wall Motor, two more Chinese automotive company projects have also been frozen

Amid India-China border tension, the Government of Maharashtra has frozen 3 automotive Chinese projects from GWM (Great Wall Motor), PMI Electro Mobility Solution (JV with China’s Foton) and Hengli Engineering. This decision was taken with consultation with the Union Government and was formally announced by Industry Minister Subhash Desai.

These three projects were collectively worth investment of Rs.5,020 crores. The Ministry of External Affairs has advised that there should be no further agreements signed with any Chinese companies. Just a few days ago Great Wall Motor had announced that they have signed MoU with Govt of Maharashtra.

This decision was taken even as the MoUs were signed prior to the Indo-China cross border tensions wherein several Indian soldiers have been killed. These MoUs were a part of the Magnetic Maharashtra 2.0 Program that got off to a start on 15th June 2020. However, the current tensions at the Galvan Valley have put a stop to these partnerships.

In January 2020, GM India, with its manufacturing base in Talegaon, had inked a Rs.3,770 crore agreement with Great Wall Motor to acquire the GM Motor automobile plant in Talegaon, Pune. It also included a joint venture between PMI Electro Mobility and Foton China for a Rs.1,000 crore unit that would create job opportunities for over 1,500 employees.

Great Wall Motor distributing dry ration to the poor in India
Great Wall Motor distributing dry ration to the poor in India

Hengli Engineering was to invest Rs.250 crores in Phase II expansion at Talegaon which would generate 150 job opportunities. The Chinese Ambassador Sun Weidong had attended an online conference last Monday when these agreements were signed.

Great Wall Motor had promised a highly automated plant in Talegaon with use of the most advanced robotic technology seen throughout the manufacturing processes. It will involve total investment of US$1 billion (Rs.7,600 crores) in a phased manner towards manufacture of premium products, the setting up of a new R&D center and building up of a supply chain which would have offered job opportunities to 3000 persons in a phased manner.

The alliance between PMI Electro Mobility Solutions and its Chinese partner Beigi Foton Motors, has also been frozen. This alliance was to set up a coach manufacturing unit in Talegaon, Pune with investments to the tune of Rs.1,000 crores. The third such project put on hold is for a Rs.250 crore investment by Hengli Engineering into a facility in Chakan, Pune.

These decisions in Maharashtra come following boycott of Chinese products taken at the Center level. Earlier the Telecom Ministry had asked both BSNL and MTNL to avoid use of Chinese equipment for upgradation and use only goods produced in India as a part of the “Aatmanirbhar Bharat” project.

The Indian Railways have also terminated a contract with China worth Rs.470 crores. This signalling contract with Beijing National Railway Research & Design Institute of Signal & Communication was entered into in 2016. The Chinese company was supposed to install signalling and telecommunication along the 417 km Kanpur-Deen Dayal Upadhyay section of which only 20 percent has been completed to date.

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