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Comm Min against ban on Chinese equipment

Nayanima Basu  |  New Delhi 

Will come out with a response on the issue shortly.

The Ministry of Commerce and Industry is against any ban on Chinese equipment and is likely to come out with a clarification on the issue shortly. Chinese telecom equipment suppliers Huawei and ZTE Corp are lobbying with the government to pre-empt any such prohibition.

A senior official told Business Standard that “certain vested interests” were responsible for whipping up sentiments against the Chinese manufacturers. “We run a trade deficit of $20-24 billion with China. We mostly import telecom equipment from there. So, where is the question of banning them?” he asked.

The official also stated that the Department of Commerce would come out with an official statement and clear the air after inter-ministerial consultations. The Ministry of Home Affairs had earlier raised security concerns over Chinese switch gears and routers, though Home Secretary G K Pillai denied reports of banning Chinese equipment and had said individual cases would be reviewed.

“A final call would have to be taken by the Prime Minister’s Office after they clarify the situation from the Department of Telecommunications (DoT). There is no ban but there are certainly security issues raised by the intelligence agencies which cannot be ignored,” said a home ministry official.

Both ZTE and Huawei plan to increase their footprint in the thriving Indian market, which boasts of close to 600 million subscribers and adds more than 20 million users a month. They allege DoT has directed Indian telecom companies not to buy equipment from them. Contracts worth millions of dollars signed with several Indian telecom biggies such as Bharti Airtel, Vodafone, Idea and Reliance Communications have been stalled.

International companies are also eyeing the Indian telecom market, which is in the process of introducing third-generation spectrum services, which would ensure faster and enhanced wireless services and expand the market for telecom equipment.

First Published: Fri, May 14 2010. 01:09 IST