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Is India betting big on Huawei?

Huawei Office Building (Public Domain) by Open Grid Scheduler / Grid Engine

A divided domestic telecoms industry, disagreement within the central government, and a desire for India to develop its own systems have made the country’s calculations on 5G all the more complicated.

Countries all around the world are busy creating their policies around the next generation of wireless technology, the 5G network. With greater speed and capacity, 5G is expected to spur innovation and underpin future smart city technology. In India, for example, it will not only provide economic benefits—estimated by some to be as much as $1 trillion by 2035—but can also be a crucial tool for social transformation by increasing access to quality education, health care, and transportation services.

Not surprisingly, New Delhi wants to be at the forefront of adopting and deploying 5G networks. In 2017, India’s Ministry of Communications set up a High Level Forum comprising representatives from key ministries, academia, experts, and industry stakeholders to approve a road map for deploying 5G by 2020. By mid-2018, the committee submitted its report with policy recommendations for technology demonstration, 5G trials, and spectrum allocations.

However, the simple task of adopting the most affordable and reliable vendor for the technology has swiftly become a tangle. The Chinese telecommunications giant Huawei has risen to the top as the most affordable and technologically advanced supplier, but it is also at the center of an ongoing battle between the United States and China for technological dominance.

Huawei’s close ties with Beijing have stoked suspicions that its equipment could be used to facilitate espionage, surveillance, and cyberattacks. In turn, the United States and some of its allies, such as Australia, have banned Huawei technology and are urging others to do the same. And so the countries caught in the middle face a dilemma: choose Huawei or any other Chinese technology company and suffer pushback from the United States or ban Huawei and face what are called “reverse economic sanctions” from China, which would entail restrictions on market access for foreign products and businesses.

Indian policymakers thus face a critical choice—one that will require them to carefully weigh and balance a broad range of economic, political, technical, and strategic considerations. As a first step, in December 2019, India’s minister for telecommunications, Ravi Shankar Prasad, announced that all applicants—including Huawei—would be allowed to participant in trials debuting 5G in India.

Huawei must have been relieved. The company had put in proposals to conduct 5G tests over the summer, and it had been allowed to showcase potential uses for its wares at the 2019 India Mobile Congress, a digital technology forum organized by India’s Department of Telecommunications.

Prasad’s December announcement—coupled with events over the last year—shows that India was probably never going to agree to the United States’ demands to block Huawei from all consideration. But that doesn’t mean that everyone in New Delhi is happy that trials are now set to begin by March.

Some people close to Prime Minister Narendra Modi’s administration have explicitly criticized New Delhi’s decision. For example, the Swadeshi Jagran Manch—an affiliate of the Rashtriya Swayamsevak Sangh, an organization that supports the ruling Bharatiya Janata Party—has repeatedly urged the government to ban Chinese telecom companies, saying they posed an “unacceptable security risk.” Meanwhile, V.K. Saraswat, a member of the government’s policy think tank, the National Institution for Transforming India, has said that allowing Huawei to participate in 5G trials will make India “vulnerable” to cyberattacks and could be a major setback to the indigenous development of 5G technology. V. Kamakoti, a member of the National Security Advisory Board, which advises Modi on security matters, echoed similar concerns and emphasized that only a purely indigenous technology could offer a truly secure 5G network for India.

The potential for indigenous technology to provide a secure and strategically neutral solution to the Huawei conundrum cannot be ignored. But its success hinges on three critical factors, namely: investment and funding, technical know-how, and a sound policy framework. India is yet to match the money spent by other countries on 5G technology; a maiden effort to set up indigenous 5G test testing in 2018 was granted a relatively paltry sum of $31.5 million, compared to the hundreds of billions of dollars across a combination of government funding and commercial investments that China has reportedly spent. On policy, although there has been talk of developing 5G under “Make in India”—a Modi initiative to boost domestic manufacturing and entrepreneurship—little has been revealed on how exactly the plan would be leveraged to develop 5G. While a homegrown solution is important and should be encouraged, it may take a long while to come to fruition. If the Modi administration wants to prioritize the early deployment of 5G, then it will likely have to consider conceding to the demands of either the United States or China.

Meanwhile, whatever the value of indigenous technology over the long term, India has to take cybersecurity seriously. In the 2018 Global Cybersecurity Index released by the International Telecommunication Union, India was downgraded by 24 positions to a rank of 47. Incidents of malicious cyberattacks and massive breaches of personal information continue to take place, such as the 2018 Aadhaar data breach and the 2019 cyberattack on the Indian Space Research Organization and the Kudankulam nuclear plant. Further slippage, coupled with the lack of robust legal and institutional mechanisms for responding to cyber-threats could have grave ramifications for personal data protection, privacy, and security, and it may even deter businesses from investing in India if they feel that their customer data and sensitive information won’t be protected.

Another consideration for the Modi government is that India’s mobile operators—particularly the so-called Big Three, Bharti Airtel, Vodafone Idea, and Reliance Jio, which together hold a share of over 50% of India’s total wireless subscriber base—are also split on Huawei. A news report from January revealed that both Airtel and Vodafone have already partnered with Huawei, ZTE, Ericsson, and Nokia to conduct 5G trials. In fact, those two companies are longstanding customers of Huawei and use its equipment for 2G, 3G, and 4G in certain service areas. In October 2019, Bharti Airtel Chairman Sunil Mittal praised Huawei’s superiority and asserted that India should leverage its population and geographical proximity to China to extract the best deal from Beijing. Yet Jio has so far avoided partnering with the Chinese firm, opting instead for Samsung. Meanwhile, government-owned mobile operators such as Bharat Sanchar Nigam Limited have entered into a memorandum of understanding with Nokia for 5G development. While the state operator’s rationale is unclear, allegations that Huawei hacked the company’s network in 2009 and 2014 may give a hint for its reasons.

This commentary originally appeared in Foreign Policy.

Harsh V Pant / Aarshi Tirkey (ORF)
14 February 2020

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