Huawei ban will sour Indian business climate

By Long Xingchun Source:Global Times Published: 2018/9/19 19:33:44

Illustration: Liu Rui/GT

According to Indian media reports, the Indian Department of Telecommunications (DoT) has barred Huawei Technologies and ZTE Corp. from its list of companies asked to partner it for 5G trials. This suggests that New Delhi may follow the US and Australia in keeping Chinese telecom equipment makers out of its 5G rollouts. But Huawei India later announced in a statement that it still maintains normal interaction with DoT and related officials, and close cooperation with local telecommunications enterprises.

Huawei, whose advanced technology and high-quality products have been well accepted by its counterparts and consumers all over the world, plays a significant role in setting international 5G standards. Years of cooperation with Indian telecom enterprises, established performance in Indian market, and recent cooperation with Indian counterparts in 5G applications all demonstrate that Huawei is highly recognized by Indian market.

Barring Huawei for non-economic reasons does no good to Indian businesses and consumers. In addition to advanced technology and quality products, Huawei's competitive price, good service and high efficiency are the key to its success on the international market, and are also the main reason why Indian telecom companies and consumers are willing to choose Huawei products.

The Indian government's decision to exclude Huawei from the market for non-economic reasons is detrimental to Indian telecom companies and consumers. With fewer competitors in the market, it will be difficult for Indian firms to get a favorable price when negotiating with a limited number of international companies.

Actually the Indian government decided for political reasons, which is no surprise for the Chinese government, enterprises, experts and scholars. India has long regarded China as its biggest competitor and primary security threat. However, as leaders of both China and India advocate promoting globalization, support free trade and oppose protectionism, especially with the greatly improved bilateral ties after the meeting between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi in Wuhan, the decision may undermine the trust between Chinese and Indian enterprises.

Security concerns are not a tenable excuse for India to bar Huawei and ZTE from its 5G construction. Huawei's founder Ren Zhengfei's experience in the army has long been taken as an excuse that Huawei is somehow connected with and serves the Chinese military. Therefore some countries claim that they bar Huawei products for security concerns.

However, in countries like South Korea and Israel, where adult men are all required to serve in the army, one can hardly find a company whose senior officials and employees have no military experience. In the US, many companies provide services for the military while their senior executives have never served in the army.

In fact, security concerns can be well solved through technical means. The production of communication equipment is highly international. Most telecom devices or parts produced nowadays are the result of international cooperation. It is impossible to completely exclude China from manufacturing.

India's ban on Huawei and ZTE will have a negative impact on China-India economic cooperation. Other Chinese companies will definitely be concerned about the political risks of investing in India and will become more cautious about investing in large projects in India, which is not conducive to the implementation of the "Made in India" policy and the expansion of economic and trade cooperation between China and India. In the context of the Sino-US trade war, China is striving to increase imports from India and reduce India's trade deficit with China. The decision by DoT is heading the opposite direction.

China has taken countermeasures against the US and Australian ban on Huawei. If India eventually prohibits Chinese enterprises from participating in its 5G construction, it will inevitably backfire. From its response to DoT's statement, it can be concluded that Huawei has not given up trying yet. It is possible that Huawei may strive for an appropriate way to participate in India's 5G construction. It is hoped that the Indian government will create a more friendly and positive environment for economic cooperation between the two countries.

The author is a research fellow at The Charhar Institute and director of the Center for Indian Studies at China West Normal University.

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