India Poised to Clear $370 Million Geely-Supported Investment in Boost to China Trade Ties

Horse Powertrain Ltd., a hybrid-engine business supported by China's Zhejiang Geely Holding Group Co., is expected to receive an approximately $370 million investment from India soon. This would be the largest industrial investment from a Chinese-linked company in recent memory. The acquisition would pave the way for Horse Powertrain to invest in Renault SA's Indian manufacturing activities, as Renault SA is another major shareholder of Horse Powertrain.

The country is set to host the production of innovative hybrid powertrains and engines by Horse, according to multiple media sources. India loosened regulations in March to encourage investments from neighbouring nations to boost domestic manufacturing, a policy aimed primarily at China. This clearance would be among the first of its kind.

Horse Powertrain Expanding its Indian Footprints

In 2017, SAIC Motor Corp., a state-owned Chinese carmaker, launched the MG Motor brand in India by purchasing General Motors Co.'s plant. This was the final big investment in the nation by a major Chinese manufacturer. Originally formed in 2024 as a 50/50 partnership by Geely and Renault, Saudi Aramco later acquired a 10% interest in Horse Powertrain. The London-based company, which employs around 19,000 people across 18 plants worldwide, is now 45% owned by Geely and Renault, as stated on its website.

Starting with Renault's facility in southern India, Chennai, the corporation is expected to make its investment in India in stages. The strong-hybrid powertrains that Horse will produce for Nissan and Renault cars sold in India are a combination of a conventional internal combustion engine with high-capacity electric motors and batteries.

Renault, which has a plant in South India, produces automobiles for Nissan Motor Co. of Japan, of which it is the largest shareholder. Later this year, Renault is set to introduce a Duster SUV in India that will be powered by horses. Horse is also in the early stages of talks to provide its powertrains to other car companies.

Automaker Eyeing India as a Major Automobile Market

Global automakers are increasingly looking to India as a manufacturing base to diversify their supply chains and take advantage of expanding domestic demand. However, since New Delhi tightened foreign investment regulations in 2020 in response to border concerns with China, large-scale projects involving Chinese businesses have been extremely rare. A year ago, India announced it would keep limiting BYD Co.'s (a Chinese EV manufacturer) access to its market.

The introduction of Horse to India further emphasises the increasing significance of hybrid cars in the most populous nation on the globe. While electric car usage is still in its infancy, gasoline-electric variants are proliferating as a result of customer demand for more fuel-efficient vehicles. Following years of relatively little market share, Renault and Nissan are reevaluating their approach to India with an eye toward expanding their influence in the country's rapidly expanding car market through the introduction of SUVs and localised production. The investment in Horse is anticipated to decrease dependence on imports and increase local procurement of sophisticated powertrain technology.