India Restricts Purchase of Chinese Telecom Equipment

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A new order from the India's Department of Telecommunications (DOT) requiring service providers to get security clearance from the DOT for equipment and software they intend to procure, is working against Chinese vendors, according to sources close to the situation.

The Ministry of Home Affairs has reportedly rejected proposals for purchase of equipment from Chinese vendors such as Huawei Technologies and ZTE, according to these sources.

DOT spokesman Satyendra Prakash said Friday that there was no ban on buying from vendors of any specific country, as was reported in some newspapers.

Requests for security clearances for equipment purchase are referred by the DOT to the Ministry of Home Affairs case by case, he said.

India and China went to war in 1962, and strained relations over a border dispute between the two countries increased last year.

The Indian government recently indicated its security concerns about the use of telecom equipment from Chinese vendors, particularly in border areas.

Chinese vendors have been doing good business in the country, including with government customers. Huawei for example sold US$1.2 billion in equipment to the government run telecom operator, Bharat Sanchar Nigam Limited (BSNL), a spokesman for Huawei said. Huawei is still delivering and installing equipment for BSNL, he added.

Huawei also sells equipment to large private mobile operators in India.

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