JSW MG Motor's EV Manufacturing In India May Be Delayed: Report

JSW MG Motor’s plan to expand its electric vehicle manufacturing in India using the government’s production linked incentives (PLI) benefits may have to be put on hold. A new report by the Times of India (ToI) suggests that this may have been done due to the brand’s link with China. 

Three sources told ToI that a decision on the company’s foreign direct investment scrutiny towards availing PLI benefits has been “held back” by an inter-ministerial panel led by the Union home secretary. The panel has been tasked with checking if the FDI proposals are in line with the government’s Press Note 3 prescription which mentions that all investments from countries sharing a land border with India would require a prior approval from the government. Acko Drive has reached out to JSW MG Motor India and this story will be updated once we receive a response. 

The review by the panel follows MG Motor India’s revised PLI application for benefits after the induction of JSW Group as a joint venture (JV) partner. JSW Group holds 35 per cent stake in the JV through its Singapore arm. SAIC formed a JV with JSW Group in a bid to get better access to fresh funds. It also diluted eight per cent stake to an Indian financial investor and gave five per cent to employees as Employee Stock Ownership Plan (ESOPs) and three per cent to dealers. After all of this, SAIC has a 49 per cent equity in JSW MG Motor India. 

Sources told ToI that the company is now urging the government for “relaxation in scrutiny in view of the majority holding by Indians”. JSW MG Motor India believes that getting PLI benefits would help ease the expensive EV manufacturing, making them more affordable. JSW MG Motor India told ToI, “the consolidated Indian shareholding after JV is 51 per cent and Chinese shareholding is 49 per cent. The company and JV partners obtained requisite clearances/ approvals be required for consummation of the transaction.”