A ban in all but name: India gradually ousting Huawei

Over the last year, the US government has been very vocal in its opposition to Chinese vendor giant Huawei playing a role in the world’s upcoming 5G networks. Their arguments on the grounds of security have gained traction in some markets, most notably helped by their latest wave of sanctions that serve to cripple Huawei’s access to American tech.

 

In contrast to this approach, the Indian government, has been remarkably quiet on the subject of Huawei – at least on the surface – with no public announcements regarding a ban on Chinese vendors. 

 

Even when tensions reached their peak, with a border clash between Indian and Chinese troops resulting in numerous fatalities, a ban was still forthcoming.

 

However, this is not to say that action was not taken. Back in June, the Indian government banned 59 Chinese apps, including TikTok and WeChat, alleging that these apps were mining Indian users’ data. July saw the government bar any country that held a border with India from participating in government procurement contracts. Finally, earlier this month, the government agreed to licence operators’ 5G trials, provided they did not make use of Chinese tech.

 

Taken together, these measures do not equate to a ban on working with Chinese vendors, but they nonetheless make it very clear that such a move would be frowned upon and may well become more difficult in future.   

 

This indirect approach at dissuading Indian telcos from working with Chinese suppliers is beginning to bear fruit, with the Financial Times quoting anonymous executive sources as saying “There is now clarity . . . It’s really game over.”

 

“The thinking is: ‘Let’s do tough rather than talk tough,’” said another anonymous official. “We don’t want to make life miserable for consumers. But when it comes to big public contracts and critical infrastructure, we would prefer non-Chinese companies. That message has gotten through to Indian business.”

 

For Huawei, such a de facto phase out would be a major blow. India is one of the world’s fastest growing markets and Huawei already has its foot in the door with contracts with Bharti Airtel and Vodafone. However, the lack of 5G trials with Huawei tech could well be a nail in the coffin for their relationship with Airtel, with the telco already striking a deal with US giant Verizon earlier this month.

 

Whether the Indian government is gearing up for a full ban on Huawei and other Chinese vendors is unclear, but it could well be a last resort for the Modi administration; by avoiding an explicit ban, it may be hoped that India can avoid the heaviest form of economic retaliation from Beijing.