India spikes Chinese IT firms expansion plans

By agencies   |   Wednesday, 21 June 2006, 07:00 Hrs
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BANGALORE: At a time when global IT majors are announcing expansion plans in India and investing billions of dollars, two Chinese companies are waiting for the government signal to expand.

ZTE and Huawei, two of the world’s most competitive telecoms gear makers want to expand in India to tap the Indian engineering base and huge market potential, but the Indian government, suspicious of their links to the Chinese communist party and Chinese military, has not let them to expand or move to a new facility.

Huawei that is present in India since 1998 has been operating out of a five-star hotel in Bangalore. The Indian government has spiked its proposal to get a trading license to sell telecom equipment in India nine times.

Just as they have in the U.S. and Europe, some of China's big companies have run smack into security concerns and other delays, say industry executives and lawyers. Protracted government reviews have tripped up Chinese forays in telecommunications and infrastructure -- sectors where India generally welcomes foreign capital and expertise.

Besides these two companies, another Chinese company facing problem getting permission in India is Hutchison Whampoa Ltd. Hutchison wants to invest in developing Indian ports but the government says it cannot give permission due to national security reasons- the same reason being used to deny permission to ZTE and Huawei.

Instances like these have not gone unnoticed in China. The Chinese Commerce Ministry had warned India not to stop expansion plans of the Chinese companies in India.

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