JSW Motors warns of delay in first car launch over China parts licence

India's JSW Motors, part of billionaire Sajjan Jindal's JSW Group, has warned that its first car launch could be delayed unless New Delhi fast-tracks licences to import ​parts from China, according to a letter reviewed by Reuters.

JSW Motors is investing $3 ​billion in its carmaking venture and plans to make hybrid and electric vehicles in the western state of ‌Maharashtra. It plans to initially use imported components while building a local supply chain.

JSW Group, a diversified conglomerate best known for its steel and cement businesses, plans to launch its first car via JSW Motors in the second half of this year.

But the rollout risks being delayed due to India's quality control rules that require all overseas suppliers to obtain a certification from local authorities before importing goods into the country.

JSW has written to India's industries ministry urging it to expedite approval for its Chinese suppliers of safety glass, including windshields and sunroofs. The suppliers were chosen after an "exhaustive exploration" of domestic and global options, the company said.

"We require to import some of the components for the planned vehicles through (an) import route as the same is not available on a 'off-the-shelf' basis with Indian automotive suppliers," ‌the company said in its December 18 letter to the ministry.

JSW and India's industries ministry did not respond to emailed requests for comment. JSW's request to the ministry and the impact of the approval delays on its new car launch have not been previously reported.

SCRUTINY ON GOODS, INVESTMENTS FROM CHINA

Introduced in 2020 to curb low-quality imports, especially from China, India's quality control rules have irritated foreign companies because the process can take several months and add to costs.

Analysts say there are deep-seated concerns about imports and investment from China because of fraught political relations between the two nations after a border ​clash in 2020.

While New Delhi-Beijing relations are improving, Biswajit Dhar, a trade economist and former professor at Jawaharlal Nehru University, said it ‌will take time for the situation to fully recover.

"The government will take measured steps," he said. "It just cannot rush to do something really big with China when we are negotiating a big trade deal with the US"

The ​ministry has yet ‌to respond to JSW's letter, a source with direct knowledge of the matter said, declining to be identified ??because the situation is ‌confidential.

JSW is trying to find alternative suppliers in Germany and Vietnam, but sourcing from those countries would be costlier and raise the car's price, the source said.

JSW has long sought to sell its own branded cars and is ‌in discussions ​with Chery Automobile ​about a technology partnership that would allow the Indian company to tap the Chinese automaker's know-how to make vehicles locally.

The firm also holds a stake in Chinese automaker SAIC Motor's India venture, now called JSW ‌MG Motor India, which ​has struggled to grow due to New Delhi's restrictions on investments from China.