General Motors said on Friday it had called off the sale of a shuttered Indian plant to China’s Great Wall Motor after they failed to obtain regulatory approvals, amid a tougher stance by New Delhi towards investments from Beijing.
GM struck a deal in January 2020 to sell the plant to Great Wall, with the Chinese SUV-maker expected to pay up to $300 million as part of a broader plan to invest $1 billion to establish a presence in India’s growing car market.
The agreement, which was extended twice, expired on June 30. “We have been unable to obtain the required approvals within the time frame of the deal,” said George Svigos, executive director of communications at GM International.
“Our strategy in India remains unchanged and we will now explore further options for the sale of the site,” he said, adding the company “hopes to achieve a price that reflects the value of the asset”. “Great Wall Motor will keep its attention to the Indian market in the future and continue looking for new opportunities,” the Chinese auto maker said in a statement on Friday, while confirming the termination of the plant deal.
The Indian government did not immediately respond to emails seeking comment. GM’s deal with Great Wall was agreed just months before India toughened its stance in April 2020 on investment from neighbouring countries including China, making them the first major casualty of the move that has held up billions of dollars of capital inflow in sectors such as automobiles and technology.
This was part of a broader crackdown by India on businesses with Chinese links amid worsening diplomatic relations. Separately, New Delhi also banned more than 300 Chinese mobile apps, including TikTok.
“It is hoped that the relevant countries will properly honour their commitment to openness and cooperation and provide a fair, just and non-discriminatory business environment for foreign investors,” China’s Ministry of Foreign Affairs told Reuters.
The move draws a line under a more than two-year effort by GM and Great Wall, forcing the US firm to restart its hunt for a buyer while it continues to spend money on maintaining some machinery in the factory