Chinese telecommunications equipment vendor Huawei Technologies plans to start having some equipment manufactured in India, a company spokesman said on Monday. The company also plans to invest US$500 million over the next five years to expand its research and development (R&D) facility in Bangalore.
The move by Huawei comes after a decision in December by the Indian government to impose anti-dumping duties on SDH (synchronous digital hierarchy) transmission equipment imported from China.
The anti-dumping duty was one of the factors that influenced Huawei's decision to make its products locally, the spokesman said. Huawei plans to make a whole range of networking equipment in the country, which will be targeted at the local market, he added.
The company had earlier said that it would consider setting up manufacturing in India, depending on commercial viability.
Huawei may set up its own facility or enter into a contract manufacturing agreement with a local company. "We haven't finalized the modalities, including the location and the date when we will start manufacturing," the spokesman said.
Huawei said in December that it plans to add about 2,000 staff in India in the next 18 months to two years, both in R&D and other functions like marketing and technical support. It currently has 4,000 staff of which about 2,000 are at the R&D center.
The Indian government recently indicated security concerns about the use of telecom equipment from Chinese vendors, particularly in border areas.
India and China fought a war in 1962, and strained relations over a border dispute between the two countries increased last year.
The Huawei spokesman however said it has been "business as usual" for Huawei, which had revenue of $1.3 billion from India last year. It expects a 50 percent increase in revenue from India this year, he added. Huawei customers include many large Indian telecommunications service providers.