However, with Prime Minister Narendra Modi signalling breaking of walls during his recent China visit, the government sought to change its outlook towards Chinese companies.
Signalling a major shift in its hardened security-centric approach, particularly against Chinese companies in key strategic sectors, Union home ministry has given its nod to let Huawei Telecommunications set up a manufacturing, trading and logistics base in India.
Chinese telecom hardware giant Huawei's proposal to set up a unit in Sriperambudur, Tamil Nadu was pending Union home ministry's clearance since 2013. It was being kept in abeyance because of IB's hard stand on keeping the Chinese companies out of the strategic sectors as they are notorious for hacking and espionage. The Huawei especially was a pariah as it is said to have deep connections with China's People's Liberation Army.
However, with Prime Minister Narendra Modi signalling breaking of walls during his recent China visit, the government sought to change its outlook towards Chinese companies.
"These concerns do not hold ground as nearly all telecom equipment being imported or manufactured here have 60% Chinese components. You cannot bar all. Instead you need to erect firewalls and trapdoors to keep them in check," said sources.
Taking a realistic view of the security clearance policy that often is blamed for being very harsh and over cautious, the home ministry in its latest correspondence to the department of industrial policy and promotion (DIPP) and department of telecommunications (DoT) has conveyed security clearance to Huawei albeit, with some riders.
These riders, as dna reported earlier, include conditions that were part of the national security clause and includes the condition that key positions of officer in-charge of technical operations, chief security officer etc of Huawei Telecommunications (India) Pvt Ltd will be held by Indian nationals.
Clearance of home ministry will have to be sought again if positions of chairman, managing director, chief executive officer and chief financial officer are held by foreign nationals.
The home ministry has also asked the DoT to draw up mandatory security parameters besides technical, quality and interface parameters to enable the definition of clear security standards for technical equipment relating to networking systems.
The DoT will also be required to set up state-of-the-art laboratory and certification facilities for security certification of foreign equipment entering the India market, through both direct and indirect routes Moreover, the home ministry also wants the DoT to have a mechanism in place for continuous auditing and testing of networks once such equipment are deployed.
The home ministry has asked DIPP and DoT to put all these requirements and systems in place within one year if they want unhindered cooperation from the ministry.
Though Huawei 's unit will be worth Rs 25 crore only, it is being looked as a test case that could open the floodgates for other companies to follow and bring in India the much awaited FDI.
"Moreover, the economic interdependence and business investments are the best counter to reduce chances of clashes," said a senior official in the security establishment.
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