Probe likely on Indian operations of Chinese telcos

A high-level meeting will be convened soon to decide on probing the India operations of Chinese Telecom companies -- 'Huawei' and 'ZTE' -- against the backdrop of the US calling the two firms a threat to American national security.

Terming the issue as sensitive, Economic Affairs Secretary Arvind Mayaram wrote to his counterpart in Department of Telecom R Chandrashekhar about it and also suggested that the matter could be brought before Cabinet Committee on Security (CCS) headed by Prime Minister Manmohan Singh, official sources said.

Both the companies, however, maintained that there was nothing wrong in their operations and that they would be complying with all security norms of the Indian government.

The meeting which will be attended by officials of Finance Ministry, Department of Telecom and security establishment will examine and may recommend whether a probe needs to be carried out against these two companies or a check should be maintained about their expansion in Indian telecom market, the sources said.

In its note, it was brought out that a copy of the US finding should be handed over to the DoT and Department of Science and Technology to assess whether the potential risks envisaged are possible and secondly whether it is possible to take any pre-emptive steps in this regard.

A US House Permanent Select Committee on Intelligence initiated investigations in November 2011 and presented its report last month. In its report, the US Committee alleged that the risk associated with Huawei's and ZTE's provisions of equipment in US critical infrastructure could undermine the US national security.

Keeping this in mind, a note from the Finance Ministry to the DoT said the copy of the reports concerned should be made available to CCS and Home Ministry and whether there was a need for changing the Foreign Direct Investment (FDI) policy parameters, the sources said.

"Huawei has been contributing to the growth of Indian Telecom industry for over a decade and has fully complied and cooperated with all the mandatory requirements of India.

"Going forward, we are fully committed to India and ready to provide necessary cooperation to the Government," Huawei spokesperson Suresh Vaidyanathan said.

ZTE spokesperson Cui Liagjun said "ZTE India is a Indian registered company and we are bound to follow and following all the compliance with the laws of land for more than 13 years since our existence in Indian market.

"And being a global leader in telecom equipments we are determined to comply by all laws of the country," Liagjun said.

Mayaram in his letter also said that Huawei and ZTE had applied to the Foreign Investment Promotion Board in 2002 and later in 2005 and 2007 and their applications were deferred due to various security considerations.