China’s flagship telecommunications company could be barred from India over security and domestic economic concerns.
“We have consulted broadly on this issue with many of our international partners,” Ambassador Harsh Vardhan Shringla, India’s envoy to the United States, told the Washington Examiner. “And, obviously, we will make our decision based on the best available options, including the development of alternative technologies that come up.”
Those comments suggest that India is in no hurry to install 5G wireless technology. That’s a bad sign for Huawei, the Chinese tech giant that has pioneered the next-generation system and is racing to dominate the global market while it has an advantage over Western rivals. American officials regard the company as a powerful platform for the Communist government’s spy agencies, so India’s decision could have major ramifications, for not only the telecommunications industry but India’s burgeoning strategic partnership with the United States.
“We understand there are certain security concerns that have been raised,” Shringla said. “We do understand, also, that there is a need to ensure that the best economical options are also considered. And in that context, I think, we will examine all options before we make a decision — including, as I said, alternative technologies that may come up.”
Shringla’s reference to 5G “alternatives” could dovetail with American interest in “an international consortium of like-minded nations” — and Huawei’s corporate rivals, such as Nokia and Ericsson — to develop networks independent of Chinese influence.
“If the United States were to take a leadership role in forging a new approach with our G-7 and other like-minded partners to bring together a public-private consortium of the best of US, European, Japanese, Korean and others efforts, we are convinced that in short order we can create 5G architecture that meets our common goals for trusted, safe and secure 5G,” Senate Minority Leader Chuck Schumer of New York suggested in May.
He signed that letter along with four other senior Democrats: New Jersey’s Bob Menendez, the ranking member on the Senate Foreign Relations Committee; Virginia’s Mark Warner, who leads the Democratic wing of the Senate’s intelligence panel; Ohio’s Sherrod Brown, the top Democrat on the Senate Banking Committee; and Senate Finance Committee ranking member Ron Wyden of Oregon.
India is a key battleground in the global competition over 5G, an economic struggle with unusually high geopolitical stakes. Secretary of State Mike Pompeo has launched an international campaign against Huawei, warning allies that a partnership with the company could jeopardize vital intelligence-sharing even within NATO. And President Trump issued an executive order in July that curtails Huawei’s ability to do business with U.S. companies, in part due to those security risks.
“I think the Indian government very much does understand that there are real strategic concerns with buying this equipment from China,” Richard Rossow of Center for Strategic and International Studies told the Washington Examiner.
Huawei has offered to sign a “no back door” agreement to protect Indian networks from prying Chinese spies. But these pledges have done nothing to allay U.S. concerns that the company would be forced to comply with a Chinese law that mandates cooperation with Beijing’s spy services.
Huawei, backed by Chinese government subsidies, has been able to offer even poor countries low-cost proposals for high-end 5G infrastructure at a time Western rivals are scrambling to keep up.
“European operators have said [in interviews] that without Huawei’s 5G technology, the 5G roll-out will be postponed by two to three years. We hold the same expectation for the India market,” Ritchie Peng, chief marketing officer of Huawei’s Wireless Network Product Line, said last week.
That warning might not have as much force as Huawei hopes, according to Rossow. Indian telecommunications companies are engaged in a “price war,” trying to win a competition for the domestic market by offering services at unsustainably low prices. That struggle is undercutting the appetite for major new investments. “Everybody is essentially bleeding money right now and debts are building up,” Rossow said.
India is expected to begin a trial process for installing 5G networks this fall, but the government hasn’t clarified whether Chinese companies will be allowed to participate. China reportedly has threatened to impose “reverse sanctions” on India if Huawei is blackballed.
Prime Minister Narendra Modi’s response to those threats is especially important, not only because of the size of the Indian market — the country of 1.3 billion people has the potential to challenge the U.S. and China as the world’s largest economy in the coming years — but because of India’s status as a proverbial “swing state” in the Indo-Pacific region, Rossow believes.
“If they decide that it’s okay, then maybe some other markets that clearly don’t fall in line with the United States might say that’s a big signal,” the CSIS analyst said. “India’s decision-making on this is going to have pretty important global repercussions.”
The debate over Huawei has taken place amid an intensifying rivalry between Washington and Beijing, one that is unfolding around the world. Modi, who aspires to cut India’s trade deficit with China, might be moved by concerns closer to home.
“We believe Indian companies, Indian expertise also offers scope to contribute to these efforts,” Shringla told the Washington Examiner.
