Vietnamese electric vehicle (EV) major VinFast has been planning its grand entry into the Indian market for a very long time. Late last year, the electric carmaker announced that it will install a manufacturing plant in India that will serve as its global production hub. This facility was set to produce 50,000 EVs annually with production reportedly set to start by mid-2025.
However, there has been no official word from VinFast since it showcased a couple of its prospective models for the Indian market earlier this year at the Bharat Mobility Global Expo. It now appears that VinFast might be facing financial hurdles which is preventing the EV maker from setting foot in India.
According to Bloomberg, VinFast is in discussions to secure up to $200 million in loans from Indian state-owned banks as it prepares to enter the world’s third-largest car market, according to a Bloomberg report citing sources familiar with the matter. Central Bank of India and Union Bank of India are reportedly among the lenders in talks with the Vietnamese EV maker, though the negotiations remain private and terms are not yet finalized.
This marks the company’s first attempt to raise funds from Indian lenders. The loan, part of an initial $500 million investment planned for India, could be issued in rupees or foreign currency under India’s external commercial borrowing (ECB) framework.
A company spokesperson confirmed to Bloomberg that VinFast was in discussions with potential partners in India, including financial institutions, to support its operations in the market, and added that further details would be shared once officially confirmed.
VinFast Targets Budget-Conscious Indian Market
VinFast plans to open its EV manufacturing plant in Tamil Nadu on June 30 and is working to finalize its distribution network. Bookings for the VF6 and VF7 models are expected to begin soon, with the compact VF3 scheduled for launch in 2026. Pricing for the models is yet to be announced.
The company is shifting focus from North America and Europe to Asia, citing high logistics costs in Western markets. VinFast founder and CEO Pham Nhat Vuong told Vingroup JSC shareholders in April that the company would prioritize growth in Vietnam, India, Indonesia, and the Philippines.
VinFast expects to open a new plant in Indonesia by October and aims to deliver over 200,000 vehicles in Vietnam this year. As it faces intense competition and mounting losses overseas, the company is seeking to strengthen its position in price-sensitive Asian markets.
Vuong has invested nearly $1 billion of personal funds into VinFast since 2023 and has pledged an additional $2 billion through 2026. Parent company Vingroup has also committed up to $1.4 billion in loans to support the automaker’s global expansion.
