Formula E has announced the cancellation of the Hyderabad E-Prix, alleging a contract breach by the new Telangana government.

The second Formula E race in India was slated to be held on February 10.

Formula E has alleged a breach of contract by the Municipal Administration and Urban Development Department (MAUD) that falls under the control of Telangana government.

"The cancellation comes following a decision by the Municipal Administration and Urban Development Department (MAUD), under the control of the Government of Telangana, not to fulfil the Host City Agreement signed on 30 October 2023," Formula E said in statement on Friday.

The inaugural electric race in the country was held in February last year with Telangana's then IT Minister KT Rama Rao playing a huge role in bringing the race to Hyderabad.

However, KTR's BRS party lost the state election to Congress in December and the new government has not shown the same willingness to host the race.

"Formula E Operations (FEO) has been left with no choice other than to formally give notice to MAUD that it is in breach of contract."

"FEO is considering its position and what steps it may take under the Host City Agreement and applicable laws. All of FEO's rights in that regard are reserved," the statement read.

Initially, a four-year agreement was signed between Formula E, Telangana government and Greenko, which has pulled out of the event after the inaugural edition.

However since the change of guard, the future of the race had been shrouded in uncertainty with Formula E raising fresh concerns last week.

"We are extremely disappointed for the huge motorsport fanbase in India. We know that hosting an official motorsport world championship race is an important and prestigious occasion for Hyderabad and the whole country," said Co-Founder & Chief Championship Officer of Formula E Alberto Longo.

"The President of the Federation of Motor Sports Clubs of India (FMSCI), Akbar Ebrahim, and his team have been incredibly supportive in bringing Formula E back to Hyderabad.

"They share our disappointment in the decision of the Government of Telangana which means that will not happen," he added.

The inaugural race in the city had delivered an economic impact of nearly USD 84 million.

"It is deeply frustrating that we cannot build on the success of the inaugural race last year, which delivered almost 84m USD in positive economic impact to the region," Formula E CEO Jeff Dodds said.

"We are also disappointed for our major Indian partners, particularly Mahindra and Tata Communications. Racing in Hyderabad was important to showcase the benefits of adopting electric vehicles in a market where pollution from vehicle engines has a massive impact on public health and the environment.”