JSW MG Motor's PLI plea under govt scrutiny over China connection

JSW MG Motor India’s proposal to avail benefits of production-linked incentive (PLI) scheme is under scrutiny, according to a report by the Times of India.

Quoting sources, TOI claimed the company’s foreign investment scrutiny towards availing of PLI benefits had been “held back” by an inter-ministerial panel led by the Union Home Secretary. The report cited MG Motor's China connection as the reason for the review.

The panel is primarily tasked with checking if FDI proposals are in line with the government’s Press Note 3 prescription.


MG Motors has submitted a revised PLI application for benefits after the induction of local partner JSW Group, which now holds a 35% stake through a Singapore arm.

MG Motor, a unit of the Chinese company SAIC, encountered difficulties in expanding its operations in India after the introduction of Press Note 3 in 2020. This regulatory measure requires government approval for FDI from countries sharing land borders with India, primarily aimed at scrutinizing Chinese investments.

SAIC, seeking fresh funding, sold a stake in its India subsidiary to JSW Group, reducing its own equity to 49%. Additionally, SAIC allotted 8% equity to an Indian financial investor, 5% to employees as ESOPs, and 3% to dealers. Now, MG Motor India, in partnership with JSW, is requesting PLI benefits, highlighting the changed ownership structure.

The company believes that accessing PLI benefits will help reduce the costs associated with EV manufacturing, making their vehicles more affordable.