News / Asia

India Relaxes Ban on Telecommunication Equipment Imports

India has relaxed a ban on imported telecommunication equipment, which was imposed because of security concerns regarding gear supplied by Chinese companies.

The Indian government has started approving imports of telecommunication equipment after imposing strict regulations.

The ban on importing telecommunication equipment was triggered by fears that Chinese-made gear could give China's intelligence agencies access to India's telecom networks.

Improved relations between India and China have not wiped away deep distrust triggered by a war they fought in 1962.

The ban on imports was eased after New Delhi asked all companies selling telecommunication equipment to India to allow regular security inspections, and make their network source codes available to the government.

Chinese companies like Huawei and ZTE, which do not want to lose share in the growing Indian market, won orders after they apparently agreed to comply.

However, American, Japanese and European equipment makers and trade groups have expressed worries about the tough regulations.

They say asking for access to their network source codes is a violation of their intellectual property rights. They are also concerned about the huge penalties, running into millions of dollars, that could be imposed in the event of any security breach.

Kunal Bajaj, a director with the consulting firm Analysys Mason, says telecommunication companies are in talks with the government.

"There is a collective effort going on between the equipment manufacturers as well as the operators to make the government understand that these types of rules and regulations are not very common, they are not standard practice in other countries, and the cost or the burden the department is imposing on industry is essentially going to impact roll-out [start-up] costs and therefore it is going to impact cost of services," he said.

Indian telecommunication operators are importing millions of dollars worth of equipment as India rolls out third-generation wireless services. These will give subscribers faster digital connections and access to more sophisticated applications.

India has more than 620 million mobile phone subscribers. That number is expected to grow steadily as operators penetrate far-flung rural areas.

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