India might block China’s Huawei over safety fears: Officers | Enterprise and Economic system Information

New Delhi cannot prioritize economic gains when an investment poses a national security risk, an official told Reuters.

India is likely to prevent its cellular operators from using telecommunications equipment manufactured by China’s Huawei under the procurement rules that will go into effect in June, two government officials told Reuters.

New Delhi is concerned about outsourcing new technology to Chinese firms, both for security reasons and out of a desire to get Indian manufacturers to produce more telecommunications equipment.

A United States campaign to contain Huawei has sparked bans or restrictions on the use of its devices around the world. However, the situation in India was exacerbated by the strained relations between New Delhi and Beijing across the common border.

India’s Telecommunications Department said Wednesday that after June 15, airlines will only be able to purchase certain types of equipment from government-approved “trusted sources” and said New Delhi could also blacklist without procurement. Huawei is likely to be on that blacklist, the two officials who refused to be named told Reuters.

“We cannot prioritize economic gains when an investment arises [a] national security risk, “said one of the officers.

Telecommunications, which did not comment on Huawei on Thursday, has yet to provide more details on the trusted sources plans or a procurement blacklist.

A third official, who also refused to be named, told Reuters that ZTE Corp, another Chinese company with a lesser presence in India, could also be ruled out.

Huawei and ZTE are under investigation for allegedly installing “backdoor” vulnerabilities to spy on the Chinese government.

Both have denied the allegations, and Huawei previously told Reuters that it is ready to sign a “no backdoor” deal with India to address security concerns.

Huawei and ZTE did not immediately respond to requests for comments.

Two of the three major Indian telecommunications providers, Bharti Airtel and Vodafone Idea, use Huawei devices. Any restriction on Huawei equipment is likely to drive costs up, according to industry analysts.

The Chinese company’s equipment and network maintenance contracts are typically cheaper than European competitors such as Ericsson and Nokia, and availability of such equipment is limited in India.

India has started accelerating approval of some of the 150+ Chinese investment proposals, valued at over $ 2 billion, that it put on hold after a standoff between the two neighbors on the controversial Himalayan border in June.

“We have already given some permits for investment proposals from China, but we will not be giving permits in sectors such as telecommunications infrastructure and finance,” a senior government official told Reuters.

Officials also said India is unlikely to lift the ban on more than 100 Chinese mobile apps last year or allow Chinese companies to contact state-owned companies like Air India and refinery company Bharat Petroleum Corp Ltd. to contribute.

India plans to raise $ 23.57 billion through the sale of state-owned companies in the twelve months beginning April 1.

The Indian Treasury Department did not respond to a request for comment.

The border conflict between India and China, the worst in nearly four decades, had marred already fragile relations, and “regaining confidence would be a long way from here,” one of the sources said.

The Indian Ministry of Technology did not respond to a request for comment on app bans.