The anti-China stance of the Indian government seems to be having an impact. Chinese telecom vendor Huawei is planning to scale down its massive research and development (R&D) operations in India, according to media reports.

The company may completely shut down parts and is apparently already in the process of moving some outside India. Huawei has been at the receiving end of various government moves recently.

Figure 1: Downsizing operations could indicate that Huawei is slowly giving up on India.
(Source: Karlis Dambrans on Flickr, CC 2.0)

The company faced income tax (IT) raids at many of its locations recently. The government is also examining and auditing Huawei's records for the last 20 years.

Additionally, there was a look out circular (LOC) notice recently issued against Huawei CEO Li Xiongwei, preventing him from traveling outside India.

A matter of trust

The Chinese technology giant has yet to acquire trusted source certification from the government, which has made it impossible for it to participate in the 5G market.

The administration has also informally asked service providers not to work with Chinese vendors, while the Department of Telecommunications (DoT) recently amended the terms of the unified access services license (UASL) agreement to prevent them from using Huawei and other Chinese gear for network expansion.

Operators had previously handed out network expansion contracts to Huawei.

In this scenario, it is not surprising the company is exploring the option of downsizing R&D operations here.

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Apart from Huawei, the Indian government is probing several Chinese companies, including Vivo, Xiaomi, ZTE and Oppo, for money laundering and tax evasion, among other charges.

Huawei employs around 3500 professionals at its R&D center in Bengaluru, India's Silicon Valley.

It was also one of the first companies to open an R&D center in India in 2000. Most of the other global vendors, including Nokia and Ericsson, also have R&D centers in India.

Downsizing operations could indicate that Huawei is slowly giving up on India. The company has been banned in other countries, including the US and Australia, allegedly because of security issues.

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— Gagandeep Kaur, contributing editor, special to Light Reading