Battle lines have been sharply etched in India between policy makers and companies who would like the country to do business with controversial Chinese telecom giant Huawei and those advocating keeping a distance.

India’s principal scientific adviser to the government, K Vijay Raghavan, who also heads a high-level committee on fifth-generation technology, or 5G, where Huawei is competing as a vendor, says India should proceed with 5G trials with all vendors straightaway, but must strike off Chinese companies from the list.

Fueling alarm in India, as elsewhere in the world, is the belief that Huawei’s proximity to the People’s Liberation Army and the Chinese Communist Party may result in the conglomerate passing on sensitive information to its government compromising India’s national security. Chinese vendors pose a security threat, say critics, given that under Chinese legislation it is mandatory for them to share information with their government.

This is a risk India can ill afford given the high stakes involving the revolutionary 5G network. The participation of foreign vendors under the scheme transcends business and is a strategic decision with large security ramifications for the country. 5G is designed to power India’s futuristic digitally-enabled industrial infrastructure. Given its scale and magnitude, the technology also makes the country uniquely vulnerable to cyberwarfare due to which security safeguards must be built in.

In India, Asia’s third largest economy and home to 1.3 billion people, Huawei enjoys about 20 percent of the market. India’s internet economy has seen exponential growth in recent years with a billion-plus users logging onto wireless technology. Experts say India is poised to become the second largest market of wireless technology in the world after the US. “The way India moves or the way whatever choices India makes will essentially determine the way the global trend will go,” says an IT analyst.

Millions of Indian consumers jumped onto the G-series bandwagon through inexpensive smartphones as they connected to wireless networks running 2G, 3G and 4G. The first stage enabled voice communications on mobile devices, 3G created a flourishing ecosystem for apps, and 4G facilitated speedier connections. However, 5G connections may be the biggest game changers forming the bulwark of emerging technologies such as the Internet of Things and machine to machine communications. This will facilitate a much more expansive range of applications and services, including driverless vehicles, tele-surgery and real time data analytics.

A government panel report points out that with 5G, the peak network data speeds are expected to be in the range of 2-20 Gigabits per second. This is in contrast to 4G link speeds in averaging 6-7 Megabit per second in India as compared to 25 Mbps in advanced countries, it added.

Importance for Indian economy

Given the significance of the cutting-edge technology, India’s decision on whether to do business with Huawei or not is crucial. At the same time there’s no denying that since it has steadfastly resisted all efforts to become a part of the China-led Belt and Road Initiative on grounds that the latter intrudes on its sovereignty, the argument to involve Huawei in the sensitive 5G sweepstakes stands considerably weakened.

“Point is, there is an enormous trust deficit with China as far as India is concerned,” said Mohan Ahuja, a Silicon Valley-based Indian IT entrepreneur. “The Doklam crisis during which Chinese forces intruded into Indian terrain posing a threat to its security as well as Beijing’s support to India’s arch enemy Pakistan have already exposed India’s vulnerability to its giant neighbor.”

Given China’s hegemonistic nature, there is a possibility that Beijing might arm twist Delhi and threaten to cripple India’s industrial infrastructure, Ahuja said. “Chinese intelligence services snooping on Indian institutions and individuals and passing the information on to Pakistan’s ISI is another risk. These plausible scenarios are good enough reason to deny Chinese firms entry into 5G else it could lay India open to cyberwarfare and intrusion on its sovereignty,” adds the expert.

The US dynamic

Adding to the complexity of the situation is pressure from the US, which has warned India that companies found supplying equipment or other products of American origin to Huawei or its units could face punitive action although US President Donald Trump last week, after meeting with Chinese leader Xi Jinping, sowed confusion by saying he would allow imports of some Huawei components into the US that don’t pose a security risk. But questions remain over what products would be allowed, with the questions remaining unanswered.

A recent letter sent to the Ministry of External Affairs is regarded as part of US efforts to intensify pressure on India to act against the Chinese company and deployment on the back of security concerns of Chinese surveillance on these networks.

The US banned Huawei’s products on May 21 and has also barred US companies from supplying software and components to the Chinese company. The pressure by the US to pick a side presents a prickly predicament for countries such as India that would much rather focus on reviving their economic growth than get caught in the US-China trade crossfire .

“The perception here is that the US action is more a matter of foreign policy,” Rajan Mathews, director of the Cellular Operators Association of India, told international media.

On its part, Huawei has consistently denied wrongdoing and has repeatedly challenged the U.S. to provide public evidence that its equipment has ever been used as a surveillance tool. Its founder last month said his company has never spied for the Chinese government and won’t in the future.

The US government is “undertaking a well-coordinated geopolitical campaign against Huawei,” one of the company’s three rotating chairmen, Eric Xu said. A joint probe by German and US cybersecurity agencies and other allies, meanwhile, too has failed to establish that Huawei could use its equipment to clandestinely siphon off data.

With these dynamics at play, and the date for 5G trials fast approaching, the Indian government has huddled with all stakeholders -- Department of Telecom, Niti Aayog, Ministry of Electronics and Information Technology, Department of Commerce -- to take a final call on Huawei’s participation in 5G trials.

Whichever route the government takes, India is not in a good space as far as network equipment suppliers are concerned. The country is currently serviced largely by two vendors — Nokia and Ericsson. And experts have already pointed out security risks arising from using European vendors as well. They argue that Huawei should at least be given an opportunity in the 5G trials, which will also help them assess whether its fears about security vulnerabilities concerning Huawei are unfounded or not.

Meanwhile, the Chinese foreign ministry has called for India to take an “unbiased and nondiscriminatory” decision on Huawei. Huawei too, has offered to sign a “no backdoor” agreement with India to allay concerns that it might use its telecom gear for surveillance.

Huawei India CEO Jay Chen cautioned India against making a wrong decision “under pressure” and said it should stick to its open and collaborative approach while dealing with the world.

“The next 10 years could be golden years of growth for India. India should take the best of the world to achieve the target it has set for itself such as the target of making the country a $1-trillion digital economy by 2025,” Chen told news agency IANS.

How “unbiased” India’s decision will be regarding Huawei – given its own economic and security imperatives as well as pulls and pressures from the obtrusive Trump administration -- we’ll soon find out.

Neeta Lal is a Delhi-based editor and journalist and a longtime contributor to Asia Sentinel