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Indian PMO to take final call on Huawei 5G participation amid border tensions with Beijing

Amid a dramatic escalation of a border dispute with China, resulting in violent clashes in the Galwan Valley overnight on 15 June and casualties on both sides, India may put the final decision on Huawei’s role in 5G on the Prime Minister’s Office (PMO).

Sources have indicated that the PMO will take a final call on allowing Huawei in commercial 5G implementation, though it has been allowed in trials.

However, India, for now, is not likely to take any retaliatory trade tariff steps, according to government sources.

A source close to the developments told Sputnik, “Huawei has already got a go ahead from the Indian government for 5G trials. The final decision, however, to allow 5G commercial implementation may be taken by the PMO”.
India allowed Chinese firm Huawei to take part in 5G trials last year despite US pressure. The US lobbied hard against Huawei, citing security concerns.

The official source also stated that a decision on ZTE, another Chinese telecom firm, is also likely to be taken by the PMO.

It may, however, be mentioned that the 5G trials in India have not yet begun and dark clouds may now hover over their future, given the enromous statutory dues that Indian telecom firms have to pay to the Indian government.

Indian telecom firms like Bharti Airtel and Vodafone Idea, among others, have a total of about $20 billion in statutory dues payable to the government.

India’s Supreme Court is also hearing a petition from the telecom players for a staggered payment of the dues. The next hearing on the matter is slated for 18 June. The source said the PMO will, of course, take into consideration all the issues, before giving a go ahead to Huawei.

On the trade front, India has ruled out any tariff war with China for the time being. That said, India has in the last two months taken a number of measures to push China back on the economic and trade front.

In April, India amended its Foreign Direct Investment (FDI) norms to restrict opportunistic takeovers of Indian firms by Chinese entities, as valuations of Indian companies hit rock bottom in the wake of the coronavirus pandemic.

Purchases of shares in India’s HDFC in early April by China’s Central Bank prompted New Delhi to decide on restricting Chinese FDI. As per the amendments, the Chinese firms will have to receive government permission to invest in India.

There was also talk about India limiting Chinese foreign portfolio investments to the country. However, Indian Finance Minister Nirmala Sitharaman ruled out any such move, saying the country has not made a decision yet.

India has also extended an anti-dumping duty on steel until December of this year and hiked import duty on bamboo to insulate the domestic industry from cheap imports.