India holds back domestic-maker status for Huawei, ZTE

Security concerns over the two Chinese telecoms equipment makers are the cause for delays in according them "domestic manufacturer" status in India, despite industry recommendations.
Written by Kevin Kwang, Contributor

India's Department of Telecommunications (DoT) are still deliberating on conferring the "domestic manufacturer" status to Chinese companies Huawei Technologies and ZTE due to security concerns raised by the local industry and security agencies.

The Hindu reported Tuesday that despite huge investments committed by both companies in setting up their research and development units and manufacturing plants in the country, the DoT is still deliberating on recognizing their contributions to the domestic market.

This is despite written recommendations by at least three prominent industry bodies--the Telecom Equipment Manufacturers' Association (TEMA), the Cellular Operators' Association of India (COAI), and the Association of Unified Telecom Service Providers of India (AUSPI)--supporting the Chinese companies' case, it noted.

An unnamed senior government official said in the report: "We have not rejected the claims of the Chinese firms...we are considering it. It is the security concern that is holding the government [back] from taking any decision."

"Moreover, the interests of Indian equipment makers are also likely to get hit once the Chinese majors make further inroads into the Indian telecom industry."

The "domestic manufacturer" status could take on an additional importance should the local government decide to go ahead with its "Buy India" trade policy which stipulates all foreign tech companies need to manufacture their products locally to trade in its market.

However, industry watchers told ZDNet such a policy could stymie, rather than encourage, investments in the manufacturing sector.

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