In light of the deadly clashes between India and China at the border, two of China’s biggest companies, Huawei and ZTE will not be allowed to participate in India’s 5G trials. The Indian government will use the newly amended investment rules that suggest national security concerns in order to restrict companies from nations India shares borders with.
The report comes from Livemint based on people familiar to the matter. If this is indeed the decision India is taking, it comes at a time when the country is restarting its process for 5G trials. India had earlier allowed Huawei to provide equipment for setting up the 5G infrastructure in the country, but the process didn’t move forward due to the nationwide lockdown implemented due to the Coronavirus.
As for the decision itself, reports suggest that a formal decision will be made in a week or two, based on approval from the Prime Minister’s office.
India’s decision to ban Chinese giants such as Huawei might cause a problem to the country as well. According to Nikhil Batra, a Sydney-based analyst, “the Indian market is already battling infrastructure and regulatory problems. The network equipment market is a small one. So India’s challenges will compound from such a decision.”
Also noteworthy is the face that Indian telecom operators are reportedly struggling to turn profits from their existing 4G networks as well. According to Rajiv Sharma, head of research at SBICAP securities, a ban on Huawei and ZTE could increase the cost of switching to 5G by around 35%.
