The past few years have seen military tension frequently simmer between India and China over border violations, suspicions of military spying, etc. And considering the fact that China has a tight control over the home grown corporations, it comes as no surprise the the Indian Government is wary of Chinese equipments used by Indian network providers in the sensitive border areas.
Among the new set of diktats issued by the Department of Telecommunication (DoT) is a proposal to ban the use of equipments from Huawei and ZTE along 14-20 circles that share the border with unfriendly countries like Pakistan and China. One cannot find fault with the proposal considering that the threat is genuine, but the network providers are clearly not happy. The main reason is that the opportunity cost to switching equipment providers is huge; firstly because there are several contractual agreements already in place with the Chinese manufacturers and secondly because the European manufacturers are much costlier than their Chinese counterparts which will reduce the margins by a great deal.
The DoT shall be coming up with an alternative proposal after discussions with the Home ministry. In the mean while, I wonder if there is a middle path that we could tread since concerns from both sides are genuine. Can import duties be raised or lowered differentially for these countries (I have not checked if that is against WTO regulations)? Or corporate profitability comes next to the country’s security and hence we need to go ahead with the ban. Let us know your opinion in the comments.