Ghosh: Growth move

New Delhi, May 12: Chinese mobile equipment makers Huawei and ZTE plan to set up manufacturing units in India.

The move comes at a time the home ministry is grappling with the issue of import of Chinese telecom equipment because of security concerns.

D.K. Ghosh, chairman and managing director of ZTE in India, said the company was “strongly looking” at setting up a manufacturing plant to dispel security worries.

Huawei Technologies today said it was also considering building a factory after its imports to the country slowed because of security reasons.

Top executives from both ZTE and Huawei are in the country to meet government representatives, including home minister P. Chidambaram, telecom minister A. Raja and commerce minister Anand Sharma.

On the curbs on Chinese imports, Ghosh said, “We have no formal communication but what we have learnt from operators is that certain companies, including ZTE, have not met the security tests.

“We offer full co-operation to the Indian government. We understand and respect their security concerns and will adhere to the security norms,” he said.

ZTE executive vice-president Fan Qingfeng said, “More than 10 per cent of our revenues come from India. It is a big market for us outside China. We are ready to pass all security tests.” ZTE today announced the expansion of its Gurgaon-based development centre.

Last year, the department of telecom had proposed to impose a ban on Chinese vendors, which was later scrapped following protests from industry.

Most new operators source equipment from Chinese vendors as it is cost effective and matches the western companies in quality. Low equipment cost is one of the reasons behind operators offering call tariffs at 1 paise per second.

Industry participants said Chinese equipment was 30 per cent cheaper than many other foreign vendors. Differences exist within the government over whether strict rules should be imposed on telecom imports.