India - Based on intelligence services, equipment imports from China are to be restricted

[business standard] Conditions to buy equipment from Chinese manufacturers have become more strict. The Department of Telecommunications (DoT), based on advisory from intelligence agencies, has said procurement of equipment from Chinese manufacturers will not be recommended for clearance “unless there is complete supply chain overseeing and auditing to the satisfaction of DoT”.

The regulation comes following applications by leading telecom operators to DoT for security clearance of Chinese equipment. DoT has also said that equipment from non-Chinese manufacturers will be cleared provided it is satisfied with the adequacy of the supply chain security measures adopted by them. This means, the manufacturers will have to ensure no embedded backdoor, trapdoor facilities are integrated at the place of manufacture outside the country.

The controls are reflected in the fact that the Intelligence Bureau recently refused security clearance to Chinese manufacturers Huawei Technologies and UT Starcom, apart from others, to supply equipment to most of the operators. A Huawei spokesperson said they are not aware of the development.

Under a new policy, telecom operators are required to get a security clearance before placing orders for equipment to various vendors. Earlier, DoT had refused permission to Huawei which had got a contract to supply GSM equipment to public sector Bharat Sanchar Nigam Ltd.

Telecom operators say the barriers being imposed on Chinese manufacturers could help European equipment makers to raise prices, which in turn would push up the cost of putting up a network, especially with 3G on its way in.

Chinese equipment are 10-20 per cent cheaper and most Indian telcos are contracting deals with Huawei and ZTE.

DoT tightens norms for Chinese telecom equipment