The tenders for upgradation of 4G network have been cancelled by state-run firms Bharat Sanchar Nigam Ltd's (BSNL) and the Mahanagar Telecom Nagam Limited (MTNL) after the Department of Telecom asked them not to use Chinese gear.
A source privy to the development said that new tenders will be floated in the next two weeks will have emphasis on preference to Make in India, and are likely to exclude Chinese companies. Huawei Technologies Co. and ZTE Corp. are among the major Chinese-origin telecom equipment makers doing business in the Indian market.
The source said that the government had told BSNL and MTNL not to use Chinese equipment in 4G upgrade, days after 20 Indian soldiers were killed in a violent clash with Chinese troops along the Line of Actual Control (LAC).
The implementation of the direction meant that the companies will have to issue a new tender. The BSNL tender was worth around Rs 7,000-8,000 crore.
Keeping in view the developing Indian capacity and in-house technology, new tenders will be floated, the source said adding this will have emphasis on preference to Make in India.
The move is part of government's push to reduce reliance of India’s telecom sector on foreign equipment and increase domestic manufacturing. Nearly 75 per cent of the telecom equipment is sourced from and provided by two major players — ZTE and Huawei.
The United States had also designated Huawei and ZTE as national security threats on Tuesday, a step toward driving the Chinese manufacturers from the US market. Both Huawei and ZTE have close ties to the Chinese Communist Party and China’s military apparatus," the US's Federal Communication Commission chairman said.
According to sources, the government may also rethink its information and communication technology strategy for the rollout of 5G in which Huawei was slated to take part.
The development comes in the backdrop of India banning 59 Chinese apps, including the likes of TikTok and UC Browser, on Monday because of security and data breach concerns.