The Indian government has blocked the import of Chinese telecommunications equipment in a move, which has puzzled many and exasperated the bosses of the country’s burgeoning mobile telecommunications companies.

The grounds on which New Delhi has acted are “security.” There is a fear that Chinese suppliers may be delivering equipment that will enable Beijing’s intelligence services to tap into calls and texts. This suspicion may be reasonable, especially given China’s tight control of its own internal communications, including the Internet. Nevertheless it seems extraordinary that India, with its very considerable IT expertise, could not identify any programming or hardware that would allow a network to be compromised and penetrated by an outside agency. Indeed any imported telecommunications equipment ought automatically to be assessed and monitored for just such a risk.
In the past, the “security” ban has only applied to telecommunications equipment installed near India’s borders with Pakistan and China. However, even this smacks of incoherence. Indian technologists are quite capable of detecting any bugging arrangements. Once identified they could either be disabled or used to spread disinformation to the covert listeners.
Then there is the news this week that hackers have achieved what the industry said was impossible. They have been able to break into mobile phone systems using just $1,500 worth of equipment, which apes a local radio mast and software that decrypts data and voice communications.
It has been speculated that the Indian government is reacting to the growing trade imbalance with China. Last year Beijing saw a $16 billion surplus. Unlike China, India’s main strength lies in its service industries and while many Chinese speak English, relatively few Indians speak Mandarin. If this is the real genesis of New Delhi’s move, then it is surely an own goal.
India’s mobile networks are expanding at a furious rate — adding 20 million new subscribers every single month. Mobile communications are simpler and cheaper to establish than fixed line networks. There is an upcoming auction of the 3G radio spectrum, which will enable providers to offer far higher access speeds, important for using the Internet. The economic benefits the mobile phone has brought to a society as large and complex as India’s are already indisputable.
The ban on the import of Chinese telecommunications equipment is not going to stop the explosion of mobile communications but it is going to make it more expensive for the companies providing it. This is because some of the technology is now going to have to be sourced from Japan, Europe or North America. There might however be an opportunity for Indian Original Equipment Manufacturers, to step into the gap left by the Chinese ban.
In the wider scheme of things, Beijing, currently absorbed with the new Shanghai Expo, will probably take the Indian restriction as pro- vocative and may consider a matching limitation on Indian goods or services. However, in the long-term trade wars never benefit anyone and Beijing should take any complaint to the World Trade Organization. Meanwhile, analysts are still trying to figure out the real reason behind the Indian government’s action