Indian car manufacturing giant Mahindra & Mahindra and China’s Shaanxi Automobile Group are reportedly planning a $3 billion (₹25,186 crore) joint venture to set up a car manufacturing unit in India.

What Happened: Both companies have agreed to form a joint venture, with Mahindra & Mahindra holding the majority stake and are waiting for authorities' approval, as per a Reuters report. The proposed manufacturing unit is expected to be set up in Gujarat, the home state of Prime Minister Narendra Modi. The joint venture aims to establish an export-oriented, integrated manufacturing hub for assembled cars, engines, and car batteries.

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Since 2020, any investment from China in India has required government approval due to increased tensions between the two countries. This proposal comes at a time when India is contemplating easing restrictions on Chinese investments in non-sensitive sectors such as solar panels and battery manufacturing.

Recently, top Indian government officials have hinted at reconsidering their stance on Chinese investment, as foreign investments in India have hit a 17-year low, the report said. Last month, India’s Finance Minister Nirmala Sitharaman expressed support for encouraging foreign direct investment from China to boost India’s exports.

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