India asks telcos to reveal Chinese gear in networks amid US-China trade war

New Delhi: India has sought details from all the telecom operators about Chinese equipment deployed in their networks amid an escalating US-China tariff war.

“The Department of Telecommunications (DoT) has written recently to all telcos to provide details of Chinese equipment in their networks,” a person privy to the details told ET.

Multiple sources also said New Delhi wants to keep track of the Chinese involvement in India’s communication space to pre-empt potential security threats from likely vulnerabilities in telecom networks. Some experts believed the tariff war between the US and China could boost trade ties between India and China.

But the Centre, over the weekend, made it clear that it would not encourage foreign direct investment (FDI) from China, despite the tariff war between the two largest economies on the planet.

Legacy contracts
While Chinese network equipment suppliers such as Huawei and ZTE have been effectively kept out of India’s 5G rollouts, they are still servicing a section of the 4G infrastructure.

These include the core, wireless and optical segments of Bharti Airtel and Vodafone Idea and 2G services of state-run Bharat Sanchar Nigam Ltd. (BSNL).

Another person told ET that Huawei gets around Rs 600 crore from Indian telecom operators annually as maintenance charges, while the amount for ZTE is much lower.

Queries sent to Bharti Airtel, Vodafone Idea, Reliance Jio and BSNL remained unanswered at the time of going to press. Huawei, too, offered no comment. ZTE couldn’t be reached for comment.

The Chinese companies are allowed to service the existing equipment, including replacement and upgradation of certain gear, but are kept out of new contracts.

The latest move by the DoT follows another similar exercise undertaken last year. Back then, the government wanted to get an idea around the quantum of SIM cards with Chinese connections.

During the 2G and 3G rollouts, most of the SIM cards used to come from China. But the situation changed once 4G was launched and now with 5G, all SIM cards are sourced locally.

The government is not looking to replace the existing Chinese equipment as of now as it would involve a large expenditure by telcos, particularly, for the older players like Bharti Airtel and Vodafone Idea.

“The share of Chinese firms is coming down…if any equipment needs to be replaced will depend on the details provided by the telcos,” said an official, without elaborating.

'Trusted sources'
As per National Security Council Secretariat (NSCS) mandate in place since 2021 — a few months after the border spat with China — suppliers need to get approval as a ‘trusted source’ to be eligible to supply telecom network gear. These need to be certified as ‘trusted products’ under fresh contracts.

The Chinese companies have so far failed to secure the trusted sources tag, in contrast with the likes of Sweden’s Ericsson, Finland’s Nokia and Korea’s Samsung that now have the requisite security clearances to bid for deals.

The trusted source tag is given to a company after due diligence by more than 10 ministries, including home, external and communications, to ensure there is no security threat.

But with more than 200 million subscribers still on 2G networks, and some even on 3G that is being rapidly phased out by telcos, there would still be a significant number of old SIM cards with Chinese chips active and may be required to be replaced in the future, say officials.

To ensure more network security, the government has been pushing for self-reliance in the telecommunications sector. Besides hardware, the thrust is to develop software in-country as well.

The development of local 4G and 5G stacks have been one of the top priorities for the government as the country not only wants to become self-sufficient in telecom equipment manufacturing, but also aims to be an exporter, competing with the likes of Ericsson, Nokia and Samsung.