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India’s Huawei bet to ‘pacify China’ is set to be next thorn in India-US ties

Telecom Minister Ravi Shankar Prasad Monday announced the decision to allow Huawei to participate in India’s upcoming 5G trials.

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New Delhi: India’s decision to allow Chinese telecom giant Huawei to participate in the country’s upcoming 5G trials is set to be another setback to the already fraught ties between New Delhi and Washington even as both haggle over a so-called limited trade deal.

After Telecom Minister Ravi Shankar Prasad made the announcement Monday, the US is believed to have expressed “concerns” over New Delhi’s call even as the Donald Trump administration understands that this is a “business decision” more than a “strategic” one, sources told ThePrint.

In his statement, Prasad said his ministry has decided “to give 5G spectrum trials to all vendors and operators (including Huawei)”.

Korea’s Samsung, Sweden’s Ericsson and Finnish Nokia are the others in the fray, sources said. The trials are expected to begin in the next quarter.

The US had banned Huawei over security concerns earlier this year and had been pressuring other countries to restrict the operations of the Shenzhen-based telecom firm.

Hard line on Huawei

Sources told ThePrint that the US will not take its hands off the issue as it has serious concerns over Indian networks “being compromised” due to the induction of Chinese products.

Bilateral ties between India and US are already going through a lean period as both sides have not yet been able to conclude a “limited trade package” that was expected to be agreed upon earlier this year.

India’s move comes at a time when, apart from the US, others like Australia, New Zealand, Japan and Taiwan have decided to keep Huawei out of their 5G network rollout.

This is not the first time that the US has cautioned India on allowing Huawei’s products for its 5G programme.

During the US-India 2+2 dialogue held between the foreign and defence ministers of the two countries earlier this month, US Secretary of State Mike Pompeo had clearly said he discussed China with his Indian counterpart, External Affairs Minister S. Jaishankar.

Pompeo had highlighted the “risks that Chinese-built communication networks, including 5G, pose to our treasured freedoms and how China’s unfair and predatory economic activity in the Indo-Pacific presents a risk to those very freedoms”.

Michael Kugelman, deputy director, Asia programme and senior associate (South Asia), The Wilson Center, said, “This development certainly won’t go down well with the Trump administration, which takes a hard line on the Huawei issue and doesn’t want its key partners doing business with the company.”


Also read: In 5G marathon, India decides to sit back and mourn as China, US, Europe race ahead


‘Afterthought’

India’s decision was more of an “afterthought” in order to “pacify China” after New Delhi’s walkout of the mega trade pact, Regional Comprehensive Economic Partnership (RCEP), in November, said a source.

Beijing has been upset with New Delhi’s decision to not to sign the RCEP despite a positive assurance in October during the informal Mamallapuram summit between Prime Minister Narendra Modi and Chinese President Xi Jinping.

So the decision to allow the Chinese giant, which already has a prominent presence in India, for 5G network trials was taken to not to irk China further.

The matter was also discussed during the last round of border talks between National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi on 21 December. Both are designated ‘Special Representatives’ of their respective countries.

India is also closely watching how Canada and Germany — where 5G trials are underway and Huawei is participating — are carrying out the exercise, said sources. Both the countries, particularly Germany, have formulated policies in such a way that it will be difficult for state-owned firms to gain a contract easily.

India too is willing to showcase 5G as a premium service, if it has to go for more expensive options such as Ericsson or Nokia, sources said.

In a statement, Huawei India CEO Jay Chen said, “We thank the Indian government for their continued faith in Huawei… We firmly believe that only technology innovations and high-quality networks will be the key to rejuvenating the Indian telecom industry.”

The company has already carried out preliminary 5G pilot projects with Indian players Bharti Airtel and Reliance Jio.

Russia, France, the Netherlands and South Korea are some of the countries that have already allowed Huawei in their 5G networks.

‘Mistake’

According to experts, India could have avoided this step over security concerns.

“This should not have been done. It is a mistake. Security concerns should be paramount. Although they have not been given a contract yet, this is not a step in the right direction,” said Jayadeva Ranade, a former Indian intelligence officer and president of the Centre for China Analysis and Strategy.

Some also believe this makes for good business call as Huawei is the market leader in 5G technology and cost-effective in comparison to others.

“It makes good business sense given the struggles of the Indian telecom industry and the reality that it will likely get better costs and rates with Huawei than it would with Western competitors,” said Kugelman.


Also read: Era of ‘borderless’ innovation is over. US, India, China using national security to box tech


 

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3 COMMENTS

  1. If US wants India to keep Huawei out, they better put something on the table to convince India to do so. Just as US looks after its interests fiercely, India has the right to do so too.

  2. India’s national interest will be determined by MEA, not the Department of State. We should have continued to buy each drop of oil Iran could pump out of the ground.

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