Amidst the border stand-off in the Himalayas, the Indian government has traced the links between Chinese companies working in the country and the People’s Liberation Army; tech giant Huawei is also among those “providing assistance, and cooperating in China’s national intelligence work”. This is the first direct indication that New Delhi will not allow China’s tech giant Huawei to participate in its 5G market.
India has claimed that as per the annual report of the US Secretary of Defence to the Congress on the “Military and Security Developments involving the People’s Republic of China 2019”, Article 7 of the law protects individuals and organisations that support, assist and cooperate with intelligence work, which has direct security implications.
Meanwhile, speculations are running high that India’s Reliance Jio will be able to take on the world’s largest providers of telecommunications equipment, networking gear and smart phones as US technology giants Facebook, Google, and Intel pour $20 billion into India’s largest telecommunications company.
Last week, chairman of Reliance Industries Ltd Mukesh Ambani claimed that they have developed a complete fifth-generation wireless network solution from scratch.
The “100% home grown technology” will be ready for trials as soon as the permissions are available and can be used next year, Ambani said, adding that the telecom operator would soon be ready to export 5G solutions.
With this, Jio entered the league of Ericsson, Nokia, Samsung and Huawei, which are working on building 5G technology. Dr. Ajey Lele, head of the Strategic Technologies centre at the Manohar Parrikar Institute for Defence Studies and Analyses, says it definitely can take on the Asian tech giant.
“From the Indian stage, it (Jio) has come to a global stage and it is a strong business house, so they are in a position to do it. They are not a small player. Now they are an important player in global networking, telecom and internet connectivity, fifth generation technology. Every aspect of IT and its allied technologies, they have started making their presence globally now,” he says.
What Did Border Tension Cost Huawei in India?
As a ripple effect of border tensions, Chinese tech giant Huawei saw India taking a U-turn from its plans to allow all vendors to join trials for the 5G technology earlier in the month. Sources in the Ministry of Information and Technology said “Huawei is out of all, no 5G trial will be for Huawei”. Earlier in January this year, Telecom Minister Ravi Shankar Prasad said “We have given, in principle, approval to allot the 5G spectrum for trials. All vendors (including Huawei) will be allowed for trials".
Banking on opportunities emerging due to the ongoing border clash with China, the US is set to collaborate with New Delhi on the 5G network. Last week, stressing upon the importance of collaboration on technology, US India Business Council (USIBC) President Nisha Biswal said “the US and India will partner on 5G and creating a kind of digital infrastructure of the future”. President Donald Trump, during the joint media briefing with Modi in February this year, urged India to choose equipment needed to build the 5G infrastructure from the "West".
However, with talk of a US-India partnership and US Secretary of State Mike Pompeo hailing Reliance Jio as a “clean teleco" for refusing to do business with Chinese firms such as Huawei Technologies Co Ltd, the company led by world’s eighth richest person is likely to benefit the most.
On India-US 5G partnership, the Indian Think Tank Observer Research Foundation's vice-president Gautam Chikermane believes companies of any nationality other than China are perfectly fine for India to engage in work with.
“Among democracies there is a value match in terms of checks and balances. These may include electoral processes, independent courts, free media and the rule of law – none of which are there in Chinese firms,” he says.
The Huawei ban has come amid allegations that the company’s products may purposefully contain security holes that China’s government could use for spying purposes. However, Huawei had already proposed entering into a “no backdoor” agreement with India to tackle the country's data privacy-related concerns.
Cost Benefit Analysis
Nevertheless, the question of the cost-effectiveness of relying on other companies has risen as Huawei holds most of the 5G patents and also offers end-to-end solutions while CISCO and Ericsson only supply bits and pieces of the hardware. It is also offering 5G technology at a cheaper rate.
Chikermane says dealing with Chinese firms constitutes a danger “because they are governed by the National Intelligence Law, under which they are bound by law to conduct intelligence activities for the Chinese state”.
But Lele says that in global supply chains, there are so many interconnections that one can always prove that a company is getting Chinese material in it or one can always find some sort of connection.
US allegations of spying have resulted in espionage concerns, and Huawei is willing to sign “no-spy” agreements with governments, including Britain, the Chinese telco company’s chairman Ren Zhengfei said.
Addressing the security concerns, Lele explains that when buying any technology, the concern is not a particular breach but data policy. He says that today, problems don't stem from third parties obtaining secret information; in today’s world it about gathering data.
If there is a fear that this technology has a covert system embedded into it, which would allow them to pick-up all the data which is required, then it becomes a major security concern, he says.