New Delhi cannot prioritise economic gains if an investment poses national security risks, an official told Reuters.
India has held up approvals for import of wifi modules from China for months, driving companies such as United States-based computer makers Dell and HP and China’s Xiaomi, Oppo, Vivo and Lenovo to delay product launches in a key growth market, two industry sources have told the Reuters news agency.
Imports from China of finished electronic devices – like bluetooth speakers, wireless earphones, smartphones, smartwatches and laptops – containing wifi modules are being delayed, the sources said.
India’s Communications Ministry’s Wireless Planning and Coordination (WPC) Wing has withheld approval since at least November, according to the sources, who were familiar with lobbying efforts by firms seeking clearance.
More than 80 such applications by US, Chinese and Korean firms have been pending with the WPC since then, one of the sources said. Even applications from some Indian firms, which bring in some finished products from China, are awaiting WPC approval, the sources added.
Dell, HP, Xiaomi, Oppo, Vivo and Lenovo did not respond to requests for comment.
India’s communications ministry did not respond to a request for comment either. Both sources said the government had still to respond to representations made by industry lobby groups and individual companies.
India’s hard stance against Chinese imports comes amid Prime Minister Narendra Modi’s call for greater economic self-reliance.
His nationalist policies have helped boost the growth of smartphone assembly in the South Asian nation, and the sources believe the government’s intention is to persuade companies to locate more of their production of electronic devices in India.
“The government’s idea is to push companies to manufacture these products in India,” one of the sources said.
“But tech companies are caught in a difficult situation – making in India would mean big-ticket investments and a long wait for returns, on the other hand the government-imposed hurdle on imports means a potential loss of revenues.”
India had previously allowed companies to self-declare wireless equipment, a move that made imports easier, but new rules in March 2019 mandated firms to seek government approval.
While India’s market and export potential have turned it into the world’s second-biggest mobile equipment maker, technology analysts and industry insiders say it does not yet have the size or scale for companies to invest heavily in making IT products and smart wearable devices.
Wary of Chinese tech
The long delay in WPC approvals also underscores India’s strategy to cut China’s influence in its technology economy, especially after a border clash with Beijing last year, though tensions have eased since.
Modi’s government this week omitted Chinese electronics maker Huawei from a list of participants in its 5G mobile telecommunications trials, though European and South Korean rivals were permitted.
And once 5G deployment begins in India, New Delhi will likely block mobile carriers from using Huawei’s telecommunications gear, Reuters has previously reported.
US firms Apple, Cisco and Dell were last year caught up in India’s border tensions with China, as Indian ports held up imports of their products from China.
In another example, reported by Reuters late last year, India’s tight control of quality clearances for electronic goods from China slowed the import of an Apple iPhone model.
Now that firms have obtained safety clearances from India’s quality control agency, getting WPC approval has become the main obstacle to importing electronic devices from China.