BYD has shelved plans to set up a car factory in India, choosing an import-only strategy under the new EV policy. Despite the hefty customs duty on imports, the company plans to boost sales by 40% this year.

Chinas top electric vehicle maker, BYD, is eyeing a significant investment in Indias rapidly growing EV market, though its plans depend on changes in the countrys stringent regulations on Chinese investments.

China's BYD wants to make cars in India but has received no "direct" signal from New Delhi on a possible easing of stringent investment rules for Chinese businesses, a top executive said, as the automaker seeks to expand in a fast-growing market.

However, it has not received any clear signal from the Indian government, on a possible relaxation of strict investment rules for Chinese companies. This was revealed by Rajeev Chauhan, chief of BYD's passenger EV business in India.

Under the policy, the approved applicants will have to set up manufacturing facilities in India with a minimum investment of Rs 4,150 crore ($500 million) for the manufacturing of e-4W (electric four-wheelers) and provide a bank guarantee.

BYD, in partnership with a local firm, submitted a $1 billion investment proposal last year to build electric vehicles in India. But New Delhi is yet to approve the plan