Economy

Indian telecom ban violates WTO rules, say experts

By Ding Qingfen and Wang Xing (China Daily)
Updated: 2010-05-06 09:16

BEIJING - India's move to prevent or make it more difficult for telecommunication companies to buy equipment from Chinese companies is a violation of the World Trade Organization (WTO) norms and clearly smacks of trade protectionism, experts said on Wednesday.

Though the Indian government has not made any official announcement in this regard, sources said the nation has stopped approvals of Chinese telecom gear imports, citing security concerns.

"The move is discriminatory and the explanation does not make any sense," said He Weiwen, an executive council member of the China Society for WTO Studies.

"India cannot reject Chinese imports citing security reasons. An import ban is warranted only if the Chinese imports are hurting Indian companies," he said.

"It is pure trade protectionism and the Chinese side must seek consultations and a proper way out," said Fu Donghui, managing director of Allbright Law Firm Beijing, a law firm that specializes in trade remedy cases.

According to reports, the Chinese government has already sent a delegation to India for discussions in this regard. The Ministry of Commerce, however, did not reply to questions from China Daily on the issue.

Foreign media said last week that India had blocked local phone carriers from buying equipment from China, citing a letter written by the Indian Department of Telecommunications to the Prime Minister's office. Later Indian officials clarified that the government did not carry out such a ban, but all equipment providers need to pass through security checks.

"The Indian government has not banned Chinese equipment yet, specifically, but has stopped approving imports. This is not a formal policy yet, but is being carried out through this mechanism," said Kunal Bajaj, a partner at Analysys Mason (India), a strategic consultancy firm.

"The suspension of imports applies to all Chinese equipment in the telecom sector and also to some Israeli-origin equipment. This is not a blanket import exclusion for all foreign equipment," he said.

Spokespersons from Huawei Technologies and ZTE Corp told China Daily that they have not got any notices.

"None of our purchase orders have been cleared since March. We have taken a hit of around $150 million in sales since the circular was issued," said a Wall Street Journal report, citing a spokesperson for Huawei India.