Investing.com -- India has decided to limit market access to Chinese electric vehicle manufacturer BYD Co (SZ: 002594 )., while simultaneously continuing to seek investments from American competitor Tesla (NASDAQ: TSLA ) Inc. This move underscores India’s ongoing concerns with China, even amidst recent signs of improving relations.

The announcement was made by India’s Commerce Minister Piyush Goyal on Monday. "India has to be cautious about its strategic interests, who we allow to invest," Goyal stated during an interview with Bloomberg Television’s Haslinda Amin at the India Global Forum in Mumbai. He confirmed that, for the time being, BYD would not be granted access to the Indian market.

The decision is not unprecedented. Last year, New Delhi rejected a $1 billion investment proposal from BYD in partnership with a local firm. Similarly, another Chinese automaker, Great Wall Motor Co., withdrew from India after failing to obtain necessary regulatory approvals. These developments highlight the challenges faced by Chinese companies seeking to enter or expand within the Indian market.

While India continues to maintain its cautious stance towards Chinese investments, it is actively pursuing potential partnerships with American companies, most notably Tesla Inc. The specifics of any potential agreements between India and Tesla have not yet been disclosed.

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