Quick Highlights:

  • BYD is evaluating local assembly in India to overcome import limits and high duties.
  • Demand has exceeded the annual cap of 2,500 imported units per model.
  • SKD assembly could cut tariffs from 70 percent to 30 percent, improving pricing.
  • India earlier rejected BYD’s full manufacturing proposal, but assembly options are now under review.

BYD Eyes Local Assembly in India as Demand Exceeds Supply

Chinese electric vehicle giant BYD is reassessing its India strategy, with local assembly emerging as a serious option as demand for its EVs continues to outpace supply. According to people familiar with the matter, the company is exploring semi-knocked-down (SKD) assembly models to navigate India’s strict import regulations and steep tariffs. From my perspective, this feels like a pragmatic middle ground for BYD in a market that clearly wants its products but remains cautious about Chinese manufacturing investments.

byd emax 7 main
byd emax 7 main

Why BYD Is Rethinking Its India Operations

India currently caps imports of fully built electric vehicles at 2,500 units per model per year, a rule that has become a bottleneck for BYD. Dealers reportedly hold hundreds of pending bookings, and most of the company’s inventory for the December quarter was already sold out. Despite import duties of up to 110 percent on CBU vehicles, BYD’s India sales still grew about 88 percent last year to roughly 5,500 units, highlighting strong underlying demand.

Local Assembly as a Strategic Workaround

After India declined BYD’s earlier proposal for a full-scale manufacturing facility, the automaker is now evaluating local assembly of semi-finished components, which is generally seen as cheaper, faster, and easier to clear from a regulatory standpoint. Under an SKD model, tariffs could drop to around 30 percent, compared with roughly 70 percent on imported CBUs, significantly improving pricing flexibility. In my view, this approach allows BYD to test the waters without triggering the same level of policy resistance.

byd seal 2025
byd seal 2025

Models, Pricing, and Competitive Positioning

BYD currently sells the Atto 3 compact electric SUV and the eMAX 7 MPV in India, alongside the Sealion 7 and Seal sedan, some of which have approvals beyond standard import quotas. The Atto 3 starts at around ₹25 lakh, placing it alongside Tata and Mahindra EVs, while the Sealion 7 is priced between ₹49 lakh and ₹55 lakh, undercutting Tesla’s Model Y, which starts at about ₹60 lakh. Even with high duties, BYD’s pricing has helped it gain traction at the premium end of India’s mass-market EV segment.

Regulatory and Geopolitical Context

Any move toward local assembly is expected to follow visits by senior BYD executives, although some top-level visits have reportedly been delayed. While India-China relations have shown tentative improvement, including the resumption of direct flights, policy support for Chinese automakers remains uneven. From where I stand, this uncertainty explains why BYD is proceeding cautiously and keeping plans at an exploratory stage.

byd atto 3 facelift 1
byd atto 3 facelift 1

Global Strategy and What Comes Next

BYD’s India reassessment is part of a broader push to diversify outside China, where growth has slowed due to reduced EV subsidies and intense competition. The company is targeting nearly 25 percent growth in overseas deliveries this year, making India a critical market despite regulatory hurdles. If local assembly moves forward, it could mark a turning point in how Chinese EV makers scale in India without breaching policy red lines.

Frequently Asked Questions — FAQs

Q. Why is BYD considering local assembly in India?

  • BYD is exploring local assembly because demand exceeds India’s import cap of 2,500 units per model, and high import duties are limiting supply and pricing flexibility.

Q. What type of assembly is BYD evaluating?

  • The company is considering semi-knocked-down (SKD) assembly, which involves importing partially built vehicles and completing assembly locally.

Q. How would local assembly affect vehicle prices?

  • Local assembly could reduce tariffs from around 70 percent to about 30 percent, potentially making BYD vehicles more competitively priced.

Q. Did India approve BYD’s manufacturing plans earlier?

  • No. India previously rejected BYD’s proposal for a full manufacturing plant, prompting the company to explore lower-cost assembly options.

Q. Which BYD models are currently sold in India?

  • BYD sells the Atto 3, eMAX 7, Sealion 7, and Seal sedan in the Indian market.

Q. Is BYD’s local assembly plan for India confirmed?

  • No. The plan is still under evaluation and has not been publicly confirmed by BYD or Indian regulators.