Huawei in $500m India outlay
Huawei Technologies, the Chinese telecoms equipment company, is to make a $500m investment in its research and development operations in the southern Indian city of Bangalore as part of an effort to avoid falling foul of tension between New Delhi and Beijing.
Max Yang, Huawei’s India chief executive, said his company was making efforts to have its local operations seen more as an Indian operation in an attempt to dispel a “mystique” impeding its business.
In the wake of the Mumbai terror attacks in 2008, Indian officials have also become more wary about the security surrounding the country’s telecoms industry, particularly in sensitive border regions.
India’s telecoms ministry said last year that Huawei’s bids to supply the state-owned Bharat Sanchar Nagam telecoms company had been held up because of security concerns.
Last month the Indian government imposed tariffs of up to 236 per cent on Chinese-made synchronous digital hierarchy transmission equipment, used in telephone networks.
The investment also comes at a time when friction between Beijing and New Delhi has risen over the disputed border territory of Arunachal Pradesh.
The Indian government has said China has become more assertive in the past two years over its territorial claims, which led to conflict between the two countries in 1962.
Huawei supplies equipment to all India’s mobile telephone networks, including Bharti Airtel, Vodafone Essar and Reliance Communications. However, the company’s senior executives admitted to the Financial Times that more was needed to be done to win over local stakeholders in India’s powerful telecoms sector.
Huawei, a leader in wireless technology, would make its R&D investment over five years to help its India-based operations become a resource for its global operations.
It would also open a manufacturing unit in India that would help it avoid steep anti-dumping duties on Chinese goods.
An executive said a manufacturing operation could be up and running later this year. The company’s Indian workforce would rise from 4,000 to 6,000 people.
Mr Yang emphasised that 80 per cent of the company’s workforce in India were Indian nationals and that the company had the same goals as the government to increase access to mobile telephony in rural areas, where penetration is little more than 20 per cent.
Huawei, founded 20 years ago by a retired Chinese army officer, has achieved formidable growth by providing technology at low cost. It has a 20 per cent share in the global telecoms infrastructure market, trailing Sweden’s Ericsson, and had revenues of about $21bn last year.
