Taking on the Chinese

India’s quest to become self-reliant in telecom equipment began as early as 2012 when the Department of Telecommunications (DoT) came out with a notification to promote domestically manufactured telecom products due to security issues with foreign equipment.

Over the years, successive notifications were issued by DoT, Ministry of Electronics and IT and Department for Promotion of Industry and Internal Trade but government enterprises – on which these rules applied – found a way out to avoid giving contracts to domestic vendors in favour of foreign players such as Huawei, ZTE, Ericsson and Nokia.

But things have changed now. The cross-border tension with China has led to a series of important developments over the past few months. To begin with, the government’s policy think-tank, NITI Aayog, conducted a meeting in early June with nearly three dozen domestic original equipment makers (OEMs), BSNL and DoT to discuss the possibility of rolling out a 4G network with indigenous capabilities. Then, in July, BSNL scrapped its 4G upgrade tender to support the consortium-based model discussed in the NITI Aayog meeting. This was followed by an order from the finance ministry on July 23 under which bidders from neighbouring countries must register with Department for Promotion of Industry and Internal Trade which, in turn, will have to take security clearances from home ministry and external affairs ministry.

So, while the conditions don’t name any country or company, industry watchers say this will effectively ban Chinese vendors Huawei, ZTE and Fiberhome from government tenders in future. It also sends a clear signal to private operators to stay away from Chinese OEMs.