Mahindra & Mahindra has firmly denied a Reuters report claiming that the Indian automaker is partnering with China’s Shaanxi Automobile Group for a $3 billion joint venture to establish a car manufacturing facility in India. In a statement released on Friday, Mahindra & Mahindra dismissed the report as “unfounded” and inaccurate, emphasizing that there are no ongoing plans or official approvals for such an investment.
The Reuters article had suggested that Mahindra would hold a majority stake in the proposed joint venture and seek Indian government approval for the Chinese investment. It also detailed plans for the new plant to assemble automobiles, engines, and batteries for export. However, Mahindra refuted these claims, calling them speculative and incorrect.
Since 2020, Indian regulations have required government clearance for Chinese investments due to geopolitical tensions, leading to the suspension or cancellation of several high-profile Chinese investment projects, including those by BYD Co Ltd and Great Wall Motor. Despite recent discussions about potentially easing restrictions on Chinese investments in non-sensitive sectors like solar panels and battery production to boost exports, no such changes have been officially implemented.
Following Mahindra’s clarification, the company’s stock experienced a 2.5% increase, closing at Rs 2,748.45 on the BSE Sensex, which saw an overall rise of 1.04%. The Reuters report, now dismissed by Mahindra, had initially fueled speculation about the $3 billion investment and the development of a new manufacturing hub in Gujarat.
Union Finance Minister Nirmala Sitharaman and Chief Economic Adviser V Anantha Nageswaran have recently supported the idea of relaxing restrictions on Chinese investments to enhance foreign direct investment and export growth, though such proposals remain under scrutiny.
