Huawei's turnkey projects to be screened

The government has sought the views of the ministries of external affairs and home on the proposal of Huawei Telecommunications, the Indian arm of Chinese telecom equipment maker Huawei Technologies, to sell its products in India.

The company has sought the government's approval to invest $60 million in India to build the infrastructure for expanding its operations and activities in the country.

With this investment, the company has told the government, it will be able to participate in turnkey telecom and information technology infrastructure projects.

"The views of the home ministry and the external affairs ministry have been sought. This has been done as the company wants to sell telecommunication products as well as to participate in key turnkey projects," said a government official. Huawei has applied to the Foreign Investment Promotion Board (FIPB) for approval.

Explaining the rationale behind expanding the scope of its operations in India, Huawei told the government it had been receiving queries from various fixed and mobile telephony service providers for its cheaper products and services.

The company is of the view that since most of the contracts for product supply by Indian companies impose the condition that the bidder should be selling products in India, it needs to expand its presence in the country.

"While Huawei Telecommunications qualifies under all other bid criteria such as turnover, existing set-up, product range, it has been unable to bid for such large telecom projects since it does not have the right to engage in trade in India," the company has informed the government.

At present, the company is permitted to provide technical and maintenance support in India for various voice, data, video communication and telecom systems in India.

According to government sources, approval to sell products in India will allow the Chinese company to offer its cheap products in India and will be able to compete in a market that is projected to grow at about 7 per cent.

Huawei has a software development venture in India called Huawei Technologies India Private Limited, which is a 100 per cent subsidiary of the Chinese company, undertaking software research and development.

The $5.58 billion Huawei Technologies employs 950 engineers and professionals in India and has invested in excess of $90 million in its two ventures in India.

The company also plans to allocate funds for Indian technical institutions and universities and will also enter into arrangements with local technical institutions to visit the company's R&D centres around the world.