India Likely To Clear $370 Mn Chinese-Linked Auto Investment Amid Improving Ties

India is preparing to approve an investment proposal worth about $370 million from Horse Powertrain Ltd, a joint venture backed by China's Zhejiang Geely Holding Group and French automaker Renault.

The investment would allow Horse Powertrain to participate in Renault’s manufacturing operations in India, Bloomberg (BBG) reported citing people familiar with the matter.

Renault reportedly plans to produce advanced hybrid engines and powertrains locally, strengthening its presence in one of the world's fastest-growing automotive markets.

The proposed investment is expected to be among the largest manufacturing commitments involving a Chinese-linked company since India tightened foreign investment regulations following border tensions in 2020.

The expected clearance comes months after India eased certain investment norms for neighbouring countries in March to encourage domestic manufacturing activity. The policy adjustment was widely seen as benefiting Chinese-linked investments that support local production.

Chennai Plant Expected to Be First Phase

Horse Powertrain is likely to roll out its investment in phases, beginning with Renault’s manufacturing facility in Chennai. The company intends to manufacture strong-hybrid powertrains that combine conventional internal combustion engines with electric motors and battery systems.

These systems are expected to be supplied for Renault and Nissan vehicles sold in India, as per BBG. Renault remains Nissan Motor Co.’s largest shareholder and already manufactures vehicles for the Japanese automaker at its Chennai facility.

Renault is expected to introduce a new Duster sport utility vehicle in India later this year, powered by Horse technology. The company is also understood to be exploring opportunities to supply powertrains to other vehicle manufacturers operating in the country.

"India is an important market for Horse Powertrain. We can confirm that we have submitted an application to the Indian authorities to have the right to invest in India and are following the official process. We are expecting a formal decision soon," the company said in a statement to BBG.

Growing Focus on Hybrids

Horse Powertrain was established in 2024 as a 50-50 venture between Geely and Renault. Saudi Aramco later acquired a 10% stake, leaving Renault and Geely with 45% ownership each. The London-headquartered company operates 18 manufacturing plants worldwide and employs approximately 19,000 people.

The proposed investment also reflects growing interest in hybrid vehicles in India. Carmakers are increasingly expanding their hybrid offerings as consumers seek improved fuel efficiency, while electric vehicle adoption continues at a gradual pace.