India reportedly weighing 5G ban on Chinese firm Huawei after border skirmishes

Arjun Kharpal
CNBC
Tue, 30 Jun 2020 00:00 UTC

• Indian government ministers discussed the country's 5G rollout plans and whether Chinese telecommunications equipment giants Huawei and ZTE should be allowed to participate, according to a report from the Times of India.
• It comes after the Indian government said it would block 59 Chinese apps such as TikTok and WeChat, claiming they are a threat to national security.
• India and China tensions have been on the rise over a border clash that has left 20 Indian soldiers dead.

© Omar Marques | LightRocket | Getty Images

In this photo illustration, the Huawei logo and Chinese flag is seen displayed on an Android mobile phone.

Huawei could be banned from participating in India's 5G network rollout, just months after it was given the green light to participate in the country's trials for the technology.

It comes after the Indian government said it would block 59 Chinese apps such as TikTok and WeChat, claiming they were a threat to national security.

Comment: The Indian govt. banned 59 Chinese mobile apps, claiming they were 'prejudicial to sovereignty and integrity':

The Ministry for Electronics and Information Technology announced the ban on Monday, stating that the Chinese-made applications were "prejudicial to sovereignty and integrity of India, defense of India, security of state and public order."
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Authorities in India have received multiple reports of "misuse" of certain applications "for stealing and surreptitiously transmitting users' data in an unauthorized manner" to servers located outside of the country, officials said. The data has been accessed and profiled by the "elements hostile to national security and defense," the ministry added.

While India did not point directly at China in the ministry's comments on the ban, the overwhelming majority of the outlawed applications are of Chinese origin. The list includes extremely popular services, such as the TikTok video-sharing platform, microblogging site Weibo, and the ShareIt file-sharing app, among others.

It was not immediately clear how exactly the ban will be implemented. The banned apps remained available for download and use in the country in the wake of the announcement, local media reported, though that is expected to change in the coming days.

TikTok denied allegations that data was sent outside the country:

The Indian branch of the Beijing-headquartered company insisted that it abides by "all data privacy and security requirements under Indian law and have not shared any information of our users in India" with any government, including China.

"Further, if we are requested to in the future we would not do so. We place the highest importance on user privacy and integrity," a statement by Nikhil Gandhi, the head of TikTok India, says.

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TikTok has rapidly grown in popularity in India, the company's biggest foreign market, where an estimated 120 million people use it.

As part of those discussions, Indian government ministers discussed the country's 5G rollout plans and whether Chinese telecommunications equipment giants Huawei and ZTE should be allowed to participate, according to a report from the Times of India.

Comment: Even though the media likes to speculate on the banning of Huawei by the Indian government, the decision seems to be aimed at promoting self-reliance and ongoing skirmishes:

Union minister Ravi Shankar Prasad underscored on Wednesday that the ban on Chinese mobile apps is a great opportunity to help Indians come up with good apps of their own and end foreign dependence for such things.

"In the wake of the ban which we have imposed...I think it is a great opportunity. Can we come up with good apps made by Indians? Let the dependence on foreign apps, with their own agenda for a variety of reasons, stop," said the IT and telecom minister.

Citing national security concerns, the central government on Monday decided to ban 59 mobile applications, including the wildly popular TikTok, linked to China. Government officials told Hindustan Times that the deliberations to ban the apps were fast-tracked after June 15 violent scrap between soldiers at Galwan valley in eastern Ladakh.

India's Ministry of Electronics and Information Technology, as well as Chinese firms Huawei and ZTE, were not immediately available for comment when contacted by CNBC.

5G refers to the next-generation mobile networks that promise super-fast download speeds and the ability to support critical infrastructure. India has lagged behind in its rollout of the technology, while other countries like South Korea and China have powered ahead.

In December, India said it would allow all vendors to participate in 5G trials with vendors. But the latest report of a potential ban on the Chinese firms appears to be a U-turn.

Tensions between India and China have been rising over their disputed border high in the Western Himalayas and a clash earlier this month left 20 Indian soldiers dead.

"The China-India ... dispute, compounded with the economic stress caused due to the (coronavirus) pandemic, has likely forced the government thinking to adopt a strategy similar to U.S. to potentially retaliate in a way where it would hurt China the most," Neil Shah, research director at Counterpoint Research, told CNBC.

India's biggest mobile network, Reliance Jio, uses Samsung for its older 4G network. The other two largest players — Bharti Airtel and Vodafone Idea — use a mixture of vendors including Huawei. All three carriers have submitted applications to do 5G tests with various vendors including Huawei, Indian publication the Financial Express reported this month.

Huawei gear makes up one-third of Bharti Airtel's current network and 40% of Vodafone Idea's network, according to Counterpoint Research.

It would be a "significant loss" for Huawei and ZTE if the government goes ahead and bans them, Shah said.

All three Indian telcos were not immediately available for comment when contacted by CNBC.

'Tide is turning'

For about a year and a half, the U.S. government has been pressuring countries to block Huawei from their 5G networks, alleging that its gear could be used by Beijing to spy on citizens of foreign nations. Huawei has repeatedly denied that it would let this happen.

Comment: See also:

• Huawei is in the crosshairs of intense US-China struggle for global economic dominance
• Blowhard Pompeo takes aim at Huawei, other Chinese tech companies: 'Trojan Horses' for Beijing spying

On June 24., U.S. Secretary of State Mike Pompeo declared that "the tide is turning against Huawei as citizens around the world are waking up to the danger of the Chinese Communist Party's surveillance state."

The latest report that India is assessing whether to ban Huawei and ZTE will likely add to Pompeo's confidence.

Washington's efforts have yielded mixed results so far. Some countries such as Australia and Japan following suit, while others like U.K. allowing the Chinese giant limited participation in its 5G rollout. But it appears more countries and mobile carriers are beginning to shun Huawei — a sign that the U.S. campaign could be working.

Telus and BCE, two of the big carriers in Canada have chosen Ericsson and Nokia to build their 5G network. Canada's government has yet to make a decision as to whether Huawei will be excluded from the nation's 5G rollout.

Britain is also reassessing its stance on Huawei. The U.K.'s National Cyber Security Center (NCSC), which is part of intelligence agency GCHQ, launched an emergency review of Huawei's role in May, following new U.S. sanctions on the firm.

Comment: The Sino-Indian border conflict is a remnant of British rule in the subcontinent due to its failure to demarcate the border with China. Low level eyeball-to-eyeball conflicts are the strategy adopted by the soldiers of both nations since then, except during the brief 1962 war.

In 1962, a Chinese response to unprepared Indian troops left India losing part of its territory and demoralised India's first prime Minister Pandit Jawaharlal Nehru, who ruled India during the crucial initial 17 years after its independence. But this increased Indian resolve and spurred the modernization of Indian forces, which helped them to handle Pakistan in 1965 and defeat them in the 1971 war.

The aftermath of the war saw sweeping changes in the Indian military to prepare it for similar conflicts in the future, and placed pressure on Indian prime minister Jawaharlal Nehru, who was seen as responsible for failing to anticipate the Chinese attack on India. Indians reacted with a surge in patriotism and memorials were erected for many of the Indian troops who died in the war. Arguably, the main lesson India learned from the war was the need to strengthen its own defences and a shift from Nehru's foreign policy with China based on his stated concept of "brotherhood". Because of India's inability to anticipate Chinese aggression, Prime Minister Nehru faced harsh criticism from government officials, for having promoted pacifist relations with China. Indian President Radhakrishnan said that Nehru's government was naive and negligent about preparations, and Nehru admitted his failings.
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The unpreparedness of the army was blamed on Defence Minister Menon, who resigned his government post to allow for someone who might modernise India's military further. India's policy of weaponisation via indigenous sources and self-sufficiency was thus cemented. Sensing a weakened army, Pakistan, a close ally of China, began a policy of provocation against India by infiltrating Jammu and Kashmir and ultimately triggering the Second Kashmir War with India in 1965 and Indo-Pakistani war of 1971. The Attack of 1965 was successfully stopped and ceasefire was negotiated under international pressure. In the Indo-Pakistani war of 1971 India won a clear victory, resulting in liberation of Bangladesh (formerly East-Pakistan)

Will Narendra Modi, who is as popular as Jawaharlal Nehru, meet a same fate while handling China? Only time will tell.

Chinese support for Pakistan along with intermittent border disputes continue to evoke anti-Chinese sentiments among Indian citizens, and calls for banning Chinese products. Despite these popular sentiments, the reality is that China is India's largest trading partner. In Indian democratic politics, the opinions of the opposition parties are transient and focus on rejecting the ruling party's decisions:

Insisting that India carried out a "digital strike" to protect the data of countrymen, Prasad sought to know why the TMC was opposing the ban on Chinese apps.

"We are witnessing a strange trend in Bengal; the ruling TMC had earlier asked why we were not banning the apps, now they want to know why we are banning the apps. This is strange, why can't they stand with the government at the time of crisis," he said.

Trinamool Congress MP had on Wednesday termed the Centre's decision to ban 59 Chinese apps including TikTok an "eyewash and an impulsive decision", and said the Union government should substitute them with Indian apps as the livelihood of many people associated with these applications had been affected.

The US could yet be surprised by India allowing Huawei to deploy 5G there in the near future:

Huawei set to abate 'spying fears' by signing 'no-back-door' agreement with India