P Anabalagan, Secretary Industries, Govt of Maharashtra
Bajaj Auto is contemplating moving a portion of its electric vehicle (EV) manufacturing out of Maharashtra and reallocating future EV investments to other States following a disagreement with the State government over nearly ₹75 crore in unpaid subsidies and restrictions on new auto-rickshaw permits, according to sources familiar with the matter.
Industry sources said the company is exploring the possibility of shifting its future EV manufacturing expansion to its Pantnagar facility in Rudrapur, Uttarakhand, while also considering directing new investments to states offering clearer policy support and incentives.
The development has prompted rival states to reach out to Bajaj Auto’s management to compete for the company’s upcoming EV investments. Karnataka and Tamil Nadu are among the States that have initiated discussions with the automaker as they seek to attract electric mobility supply chains, industry sources have confirmed.
The disagreement stems from Bajaj Auto’s tensions with the Maharashtra transport department over delays in subsidy payments and a recent decision to restrict the issuance of new auto-rickshaw permits in the State, citing market saturation.
Pending subsidy payments owed to Bajaj Auto are estimated to have accumulated to around ₹75 crore, although the company has reportedly received partial payments.
The state seeks to downplay the dispute.
The Maharashtra government has sought to downplay the issue as it continues engagement with the company.
P.Anbalagan, Secretary (Industries), Government of Maharashtra, described the subsidy issue as relatively minor from a budget perspective while emphasising that the State remains committed to working with industry.
“That is a very small component problem from a budget perspective. The government is there to engage with industry, and we are working closely on the issues,” Anbalagan told businessline during the Confederation of Indian Industry (CII) Maharashtra Annual Meeting, where he outlined the State’s $1-trillion manufacturing ambitions.
The situation drew wider attention after Bajaj Auto managing director Rajiv Bajaj publicly criticised the state’s EV policy, calling it a “massive failure” and saying that in his 36-year career, he had never witnessed such a major policy breakdown.
Permit Curbs hits its key market, Maharashtra.
Analysts say the permit restrictions could significantly affect Bajaj Auto, given its strong presence in Maharashtra’s three-wheeler market. The state accounts for roughly 15–17 per cent of the company’s domestic ICE three-wheeler volumes and about 15 per cent of its overall three-wheeler sales, according to analyst estimates.
Bajaj Auto is estimated to hold around 87 per cent market share in Maharashtra’s three-wheeler segment, making it particularly sensitive to regulatory changes.
Industry executives say the episode highlights coordination gaps within the state government. While the industries department, led by Chief Minister Devendra Fadnavis, focuses on attracting manufacturing investment, the transport department under Minister Pratap Sarnaik oversees subsidies and permit decisions.
The potential shift is significant given Bajaj Auto’s existing investments in Maharashtra. Through its subsidiary Chetak Technology Ltd, the company has invested around ₹750 crore in its EV ecosystem at its Akurdi facility in Pune, which serves as the manufacturing and R&D hub for the Chetak electric scooter.
Supporting vendors have invested another ₹250 crore in the local component ecosystem, while the company has earmarked ₹420 crore for EV-related capital expenditure, suggesting that any expansion outside the state could affect the broader vendor network.
Industry executives warn that such disputes can ripple across the ecosystem. “When a large OEM pauses or redirects investment decisions, the impact is felt across vendors and employment linked to the supply chain,” an industry executive said.
Maharashtra remains India’s largest automobile manufacturing hub, contributing about 20–38 per cent of the country’s automobile output by value. Maharashtra produces about 20 per cent of India’s vehicles, but its contribution to the industry’s gross value added is much higher due to a focus on premium and heavy duty vehicles. The Pune–Pimpri-Chinchwad region, often called the ‘Detroit of India’, hosts more than 4,000 manufacturing and ancillary units.
businessline reached out to Bajaj Auto for comment but did not receive a response by the time of publication.
Published on March 16, 2026
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