Huawei Forced Out of India, But Without Full Ban

From battle over border to battle over 5G . . .

What began as a border standoff between India and China in May has evolved into war over trade and investment, particularly regarding the high-tech sector. Since 2019, 5G vendors have been racing to secure India’s smartphone market, the second-largest in the world. After the border conflict turned deadly in June, however, India’s Department of Telecommunications prohibited 5G testing by Chinese vendors and is quietly removing all of their existing equipment, including the equipment of Huawei Technologies. Unlike allies such as the U.S. and Australia, however, India has carefully sidestepped an outright ban on Huawei.

India’s Jio could fill the vacuum . . .

The ongoing border dispute, coupled with a large trade deficit with China, has led New Delhi to take various retaliatory measures, including reducing imports from China, greater control over Chinese FDI, and blocking Chinese mobile applications. While the Narendra Modi-led Indian government’s actions and rhetoric continue to fuel anti-China public sentiment, the lack of a formal ban on Huawei, which controls about 24 per cent of the market share for telecom equipment in India, is confusing for the country’s telecom industry. The status of existing contracts with two of the largest Indian network providers, Bharti Airtel and Vodafone Idea, remains unclear. Meanwhile, the Mukesh Ambani-led telecom operator, Jio, is ready to swoop in to fill the vacuum left by Huawei. According to the Financial Times, the removal of Chinese vendors from India will create serious operational issues in terms of providing quality 5G kits to meet India’s growing potential as a digital superpower.

Canada following suit?

Canada has been on the receiving end of China’s retaliatory measures since it detained Huawei CFO Meng Wanzhou in December 2018. Despite peer pressure from its Five Eyes allies, all of whom have blocked Huawei from their 5G networks, Canada, like India, has delayed any formal decision on the tech giant. As the telecom industry grows impatient with Canada’s indecisiveness, Bell Canada and Telus have already teamed up with Ericsson and Nokia to build 5G telecom networks, despite having used Huawei’s 4G gear in the past.