Manufacturers urge temp permission to source from their China factories

Non-Chinese telecom gear manufacturers such as Nokia, Ericsson, Cisco, Dell and HP, have urged the government that they be temporarily allowed to source network equipment and components from their factories located in China for a faster rollout of 5G networks in India.

In the wake of the Indo-China border standoff around two years ago, the government had barred Chinese gear makers Huawei and ZTE from supplying 5G equipment to the Indian telecom operators. For non-Chinese vendors, the only bar was that the equipment they supply should not be imported from their factories located in China.

Though these companies have small production bases in India and other European and US locations, their sizeable base is in China.

Since the 5G auctions are round the corner, these vendors want some relaxation on the China clause so that they are able to help telecom operators roll out services faster. They have said that they need some 6-9 months to relocate their China bases to India and after that will be compliant with all the regulations. If given such a relaxation, the vendors have said they would provide the security agencies with all granular details about their products to prove there are no malware in their equipment manufactured in China.

Some of these firms have also been selected by the government for the production-linked incentive scheme for telecom equipments.

The vendors are hopeful of a favourable response from the government as earlier it had assured the electronics sector of a case-by-case relaxation in matters of investment by ancillary firms of global smartphone and IT hardware manufacturers who are participating in the PLI schemes.

Further, as per the new regulations, vendors have to provide all details regarding their networks, like core 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 procure as well details about rollout of networks, expansion and upgrades, every time such things take place. Similarly, the telecom vendors have to submit all details about their company, directors, businesses, manufacturing, shareholding pattern, etc, to the NSCS.

Even multinational firms, which have an India-registered subsidiary, have to provide shareholding pattern to ascertain ultimate beneficiaries. The global vendors need to provide nationality details about their key people such as board of directors, global president/CEO and ownership breakdown by type of owner and country. The vendors also need to submit details about global locations of manufacturing, service delivery centres, locations for R&D, etc.

In such a scenario, the non-Chinese vendors feel that the government can provide them interim relief without jeopardising the country’s security. Financial Express