“We hope the Indian Government will treat all foreign investments fairly and justly and provide a level playing field to all investments. We also hope the Indian Government will make independent decision on 5G for the long term benefit of India, irrespective of the country of origin.”
That was from an address by Huawei’s India CEO Jay Chen at an event organised by the CII (Confederation of Indian Industry) in Delhi to facilitate a high level business delegation from China in town under the bilateral strategic economic framework. Chen’s address enlivened a rather dull programme involving Indian and Chinese business leaders.
Speaking in Mandarin he said: “As we carry out our business in India, we are well aware of our responsibilities and obligations for complying with all relevant laws and regulations of the Indian government. To ensure the legal compliance of operations, we have established a strict compliance management system … regularly implemented internal monitoring, inspection and audits.”
Chen was clearly using the occasion to make another pitch for his company to be part of India’s forthcoming 5G trials. The hitch is there’s no clarity on when the trials will be held although a formal announcement is expected this month. Some reports have said Huawei will be excluded from the trials because of its close links to the Chinese government, hinting at espionage.
For that reason, Huawei is being excluded from 5G “core networks” in Europe, (although whether that is technically possible given the density of the 5G ecosystem is not clear). But here’s more on Europe. That core requirement is being changed to “reliable supplier”, meaning the company supplying 5G equipment should not be influenced by its own government!
The Italian government has armed itself with “golden powers” that would allow it to regulate the equipment supply deals for 5G telecom services. Local media reports said it reflected concern over the role of Huawei and ZTE in 5G networks. As for Australia, Japan and New Zealand, all have banned Huawei.
The U.S. policy on 5G technology notes that “it’s very important to look at the supply chain of the vendors … These vendors of hardware and software technology could cause data to be exfiltrated for purposes that are not authorized by the user … could cause intellectual property that belongs to businesses and corporations to be taken or stolen and could also cause disruption of critical services like water and power distribution. So it’s very important that we have trust in those vendors of 5G technology.”
It means the U.S. could impose conditions on Indian companies servicing its 5G market, such as not using any Chinese equipment. This presents problems for India as we are heavily dependent on Chinese hardware. Opinion in the U.S. has also hardened against China across the political spectrum. Even if President Trump wanted to back away from some of the measures against Huawei, he will not be able to because there is a lot of legislation being brought against Huawei and Chinese firms in the U.S.
The point to note, say some industry analysts, is that it’s not only Chinese and U.S. firms that could fall victim to Washington’s new diktats, it could easily be Indian firms. Therefore, the need for India to think and act carefully.
The Chinese have not made it easier for themselves. Last month reports from Beijing alluded to Indian diplomats being warned that if Huawei was excluded from the 5G trials, there would be “reverse sanctions” on Indian firms in China. Of course, no Indian diplomat either in Beijing or Delhi would confirm that but it is widely believed to be true. Official opinion in India against Huawei may have even hardened.
Huawei CEO Jay Chen is fighting back. In his address he referred to the 6000-odd employees in India 90 per cent of them local; of the R&D centre in Bengaluru which is the largest outside China; of their global service centre which provides technical support and services to networks in more than 30 countries, and so on. One could say Chen’s broad presentation on Huawei is indirect acknowledgement of the challenges before him.