India may bar telcos from using Huawei equipment over security fears

Photographer: Krisztian Bocsi/Bloomberg

India is likely to block its mobile carriers from using telecom equipment made by China’s Huawei, two government officials said, under procurement rules due to come into force in June.

New Delhi is wary about awarding new technology business to Chinese firms both because of security fears and a desire to get Indian manufacturers to produce more telecoms equipment.

A U.S. campaign to curb Huawei has triggered bans or limits on the use of its equipment around the world but the situation in India has been amplified by strained relations between New Delhi and Beijing over their shared border.

India’s telecoms department said on Wednesday that after June 15 carriers can only buy certain types of equipment from government-approved “trusted sources” and said New Delhi could also create a “no procurement” blacklist. Huawei is likely to feature on this embargoed list, the two officials, who declined to be named, told Reuters.

“We cannot prioritise economic gains if an investment poses national security risk,” one of the officials said.

The telecoms department, which did not comment on Thursday about Huawei, is yet to provide further details on the plans for trusted sources or a procurement blacklist.

However, a third official, who also declined to be named, told Reuters that ZTE Corp, another Chinese firm which has a smaller presence in India, could also be excluded.

Huawei and ZTE are under scrutiny for allegedly installing “backdoor” vulnerabilities to spy for the Chinese government.

Both have denied the allegations and Huawei has previously told Reuters it is ready to enter into a “no backdoor” deal with India to allay security concerns.

Huawei and ZTE did not immediately respond to requests for comment.

Two of India’s three big telecoms carriers, Bharti Airtel and Vodafone Idea, use Huawei gear. Any restriction on Huawei gear is likely to push up costs, industry analysts say.

The Chinese firm’s equipment and network maintenance contracts are typically cheaper than European competitors such as Ericsson and Nokia and there is limited availability of such gear in India.

India has begun to fast-track approvals of some of the more than 150 Chinese investment proposals worth over $2 billion it had put on hold after a June standoff between the two neighbours on the disputed Himalayan border.

“We have started giving some approvals to investment proposals even from China, but we will not give any approvals in sectors like telecom infrastructure and financials,” a senior government official told Reuters.

The officials also said that India is unlikely to overturn last year’s ban on more than 100 Chinese mobile apps or allow Chinese companies to bid for stakes in state-run firms such as Air India and refiner Bharat Petroleum Corp Ltd.

India plans to raise $23.57 billion in the 12 months from April 1 by selling state-run companies.

India’s finance ministry did not respond to a request for comment.

The India-China border clash, the worst in nearly four decades, had soured already fragile relations and “regaining trust would be a long road from here”, one of the sources said.

India’s technology ministry did not respond to a request for comment on app bans.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.