India is expected to approve an investment of approximately US$ 370 million from Horse Powertrain, a hybrid powertrain venture backed by China's Zhejiang Geely Holding Group and France's Renault SA, according to media sources citing people familiar with the matter.

The proposed investment would represent one of the largest manufacturing investments by a Chinese-linked company in India in recent years and would be among the first approvals granted since India relaxed its rules in March governing investments from neighbouring countries that share a land border with the country, a category that primarily applies to China.

The policy change was introduced to support domestic manufacturing. According to people familiar with the matter, who requested anonymity because the discussions are private, the investment would enable Horse Powertrain to inject capital into Renault's manufacturing operations in India. The company intends to manufacture advanced hybrid powertrains and engines in the country.

Horse Powertrain was established in 2024 as an equal joint venture between Geely and Renault. Saudi Aramco subsequently acquired a 10% stake in the company, reducing Geely's and Renault's holdings to 45% each. According to the company's website, the London-headquartered business operates 18 plants globally and employs approximately 19,000 people.

The investment is expected to be implemented in phases, beginning at Renault's manufacturing facility in Chennai, Tamil Nadu. According to people familiar with the matter, Horse plans to manufacture strong-hybrid powertrains, which combine a conventional internal combustion engine with high-capacity electric motors and a battery system, for Renault and Nissan vehicles sold in India.

Renault is Nissan Motor's largest shareholder and already manufactures vehicles for the Japanese automaker at its South India facility. Renault is also expected to launch the Duster sport utility vehicle in India later this year, powered by Horse technology.

According to people familiar with the matter, Horse is also engaged in preliminary discussions regarding the supply of its hybrid powertrain technology to other automakers. In a statement to media sources, Horse Powertrain said: "India is an important market for Horse Powertrain. We can confirm that an application has been submitted to the Indian authorities for permission to invest in India, and the company is following the official process. A formal decision is expected soon."

India's commerce ministry did not immediately respond to requests for comment, according to media reports. The proposed investment is expected to increase local manufacturing activity, expand local sourcing of powertrain technology and reduce reliance on imported components. The investment would also mark a notable development in India's approach towards Chinese-linked investments. Large-scale investments involving Chinese entities have remained uncommon since New Delhi tightened foreign investment regulations in 2020 following border tensions between the two countries.

According to media sources, the last major Chinese automotive investment in India occurred in 2017, when state-owned SAIC Motor acquired a General Motors plant to launch the MG Motor brand in the country. That business was subsequently restructured and is now majority-owned by Indian shareholders led by JSW Group.

India's restrictions on Chinese investment have also affected market access for Chinese electric vehicle manufacturer BYD. The government stated last year that it would continue to restrict the company's access to the Indian market, although BYD continues to evaluate opportunities to expand its presence in the country despite the regulatory constraints.

The planned investment also reflects growing interest in hybrid vehicles in India. Automakers are increasingly introducing petrol-electric models as consumers prioritise improved fuel efficiency, while the adoption of fully electric vehicles continues at a slower pace.

Renault and Nissan are simultaneously revising their strategy for India after years of limited market share. Both companies are focusing on sport utility vehicles and increased local manufacturing to strengthen their position in the market. The Horse Powertrain investment is expected to support these efforts while increasing domestic production of advanced powertrain technologies.

Related industry developments include Renault identifying India as a key market within its global growth strategy, while Toyota is planning a new manufacturing facility in the country to produce a sport utility vehicle model.