India Dismantling Anti-China Procurement Policy

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India has allowed government-run telecommunications service provider Bharat Sanchar Nigam (BSNL) to purchase equipment, software and services from any foreign vendor, the country's minister of state for communications and information technology, Sachin Pilot, told the upper house of Parliament in India on Thursday.

The move removes a ban on the purchase of equipment by BSNL from Chinese vendors for deployment in some parts of the country.

Last May the government, citing security reasons, ordered BSNL to not purchase gear from Chinese vendors for use in regions of the country that are considered politically sensitive because they border China and Pakistan, Pilot said in a written reply to the Rajya Sabha, according to India's Press Information Bureau.

As it is a public sector undertaking, BSNL's network has to be relied upon in emergency, Pilot said. BSNL had a 75 percent share of the fixed line market and 11.44 percent share of mobile connections in the country at the end of June, according to the Telecom Regulatory Authority of India.

India and China have a border dispute and fought a war in 1962. Indian security agencies are suspicious that Chinese vendors may install spyware, malware, and other security traps in the equipment sold to Indian networks.

Chinese vendors say the government has also blocked imports of Chinese equipment by private operators starting earlier this year. The Department of Telecommunications denied that there was a ban against vendors from any country.

BSNL however excluded Chinese vendors from a tender earlier this year for the supply and installation of mobile telephony equipment. The notice inviting tenders for the roll out of 5.5 million lines of GSM (Global System for Mobile Communications) specifically invited the Indian operations of Alcatel-Lucent, Ericsson, and Nokia Siemens to bid.

The government now expects that new security rules will address concerns about procurement from foreign vendors, Pilot said. The rules, introduced in July, require that the government have access to source code and other design details of equipment supplied by foreign vendors, besides making them responsible for any security breach even after the equipment is installed in the network.

Huawei Technologies, a Chinese vendor, said on Thursday that it was willing to follow the new rules. It hopes to get the government to clear about US$300 million in business it has in India. Some other vendors including ZTE of China and Ericsson have to still commit officially to the new rules.

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