Huawei and ZTE have been in the eye of a storm with the Indian government banning these companies from selling telecom equipment in India due to security concerns.Note the relations between India and China have never been cordial with a war being fought in 1962 between the two countries and China continues to generously aid Pakistan which is India’s arch enemy.There have been reports that Huawei does not allow Indian nationals to enter restricted parts of its R&D centre in India .It is also known that ZTE has very close relations with the Chinese government making the Indian security agencies even more wary.
China’s government which has always been a big supporter of their Industry nudged India on lifting the ban without condemning the ban.India is the fastest growing market in the world and crucial for any telecom equipment manufacturer.Huawei and ZTE have been trying to mollify the Indian authorities by planning to set up plants in India and building R&D centres.
China’s commerce ministry said on Monday New Delhi should not discriminate against Chinese firms, but did not directly condemn a bar on Indian operators buying telecoms equipment from two Chinese companies.India has banned mobile phone operators from placing orders with ZTE Corp and Huawei Technologies because of security concerns,industry sources say.
But Beijing, which has not shied away from criticising other countries, including the United States, over investment and trade restrictions, appears to be downplaying the ban.Commerce Ministry Spokesman Yao Jian, when asked about the ban, said New Delhi should aim for a fair and transparent investment climate and emphasised the large stake Indian firms have in the Chinese market.
“We hope that (Indian) policies to be launched should be fair to all enterprises…and should not discriminate against Chinese enterprises,” Yao told a regular news conference, in Beijing’s most extensive comments on the issue so far.”The investment by Indian firms in China is larger than Chinese firms’ investment in India, and China has created a very good service and investment environment for foreign investment.”
Indian telecom operators which have spend huge amounts of capital on winning the 3G auctions have now joined the Chinese govt in supporting Huawei and ZTE as well . They need to source cheap equipment and Huawei and ZTE are known for being the cheapest makers around.Not that there is a lot of players in the world.The other major supplies are European or US and considered much more expensive than the Chinese ones.
Chinese firms won the backing of Indian companies on a day when the brass of ZTE called on Union Home Secretary G K Pillai in Delhi in an effort to allay the government’s security fears. Chinese equipment makers, including ZTE and Huawei, have been denied security clearance to sell their networks to Indian companies. Top executives from Huawei have also sought time from Home minister P Chidambaram and principal secretary to the prime minister, T K A Nair to discuss the same issue.
“The Chinese are the leaders and have undertaken major R&D (research anddevelopment) and they control 50 per cent of the global market,” said Anil Sardana,managing director of Tata Teleservices, which has bought substantial Chinese equipment.“By subverting the technological innovations and particularly dollar-to-deliveryefficiency, which are by far the best from these Chinese companies, you are not allowingconsumers access to new technology.”
Sardana.Tatas, he said, have been denied permission to import even computers and servers from China because of the security concerns. The views were echoed by the Cellular Operators Association of India (COAI), the industry lobby for GSM players.