For faster 5G rollout: Telecom gear makers seek relief from Chinese sanctions

Non-Chinese telecom gear makers such as Nokia, Ericsson, Cisco, Dell and HP have requested the government to allow them to temporarily source network equipment and components from their factory in China for rapid rollout of 5G networks in India.

Nearly two years ago, in the wake of the Indo-China border stalemate, the government barred Chinese gear maker Huawei and ZTE from supplying 5G equipment to Indian telecom operators. For non-Chinese sellers, the only bar was that the equipment they supply should not be imported from their factory located in China.

Although these companies have small manufacturing bases in India and other European and US locations, their large bases are in China.

Since 5G auctions are on the corner, these vendors want some relaxation in the Chinese trend to enable telecom operators to launch services faster. They said it would take them about 6-9 months to relocate their China base to India and after that all the rules would be followed. If such a waiver is granted, vendors say they will provide security agencies with all the granular details about their products to prove that their Chinese-made equipment has no malware.

Some of these companies have been selected by the government for production-linked incentive projects for telecom equipment.

Vendors are optimistic about a favorable response from the government as it has previously assured case-by-case relaxation to the electronics sector in investing in subsidiaries of global smartphone and IT hardware makers participating in the PLI scheme.

Further, under the new regulations, vendors are required to provide all details related to their network, such as basic equipment, access equipment, transport equipment and support systems to the National Security Council Secretariat (NSCS). The information includes every detail about the vendors from whom they collect, as well as details about the rollout, expansion and upgrade of the network, each time such an event occurs. Similarly, telecom vendors are required to submit all details about their company, director, business, production, shareholding pattern, etc. to NSCS.

Even multinational corporations, which have an India-registered subsidiary, have to provide a shareholding pattern to ensure their ultimate beneficiary. Worldwide vendors are required to provide details of nationalities to their key individuals, such as the Board of Directors, the Global President / CEO, and the ownership breakdown by owner and country type. Vendors need to submit details about the global location of the product, service delivery center, research and development location, etc.

In such a situation, non-Chinese vendors feel that the government can provide them with interim relief without jeopardizing the country’s security.