China's ZTE Corp said on Wednesday it had been told by operators that it had failed Indian security tests necessary to be able to supply network gear to the world's fastest-growing mobile phone market.
China's second largest wireless equipment maker would take a series of measures, and may set up a manufacturing plant in India, to allay the security concerns of Indian authorities.
India's telecoms market has come under the spotlight after persistent media reports that New Delhi had banned network gear made by companies from neighbour and political rival China because of security fears.
The government has denied that any country-specific ban has been imposed but says imports of such equipment need security clearance.
"We have no formal communication but what we have learnt from operators is that certain companies including ZTE have not met security tests," ZTE's India unit Chairman D.K. Ghosh told reporters.
"ZTE fully understands and respects the security concern of India government and will unconditionally adhere to the policies and relative requirements of the India government," ZTE Corp's India unit said in a separate statement.
But ZTE India added: "We hope to receive the same equal treatment that other manufacturers can expect in India."
Huawei Technologies, China's leading telecoms gear maker, and ZTE already supply Indian carriers and have given global rivals, including market leader Ericsson, tough competition in the booming market.
Ghosh said about $300 million worth of orders to be placed by operators in India with various telecoms equipment makers may have been stalled because of the security clearance issue.
Chinese companies have stepped up a charm offensive in India following concerns about entry restrictions, especially as foreign equipment makers want to sell third-generation equipment to operators. 3G networks will be launched later this year and will require the procurement of billions of dollars in equipment.
ZTE's senior management will meet India's Home (Interior) Secretary G.K. Pillai on Thursday to discuss the security concerns, Ghosh said.
The Indian government has made it mandatory for telecoms firms to obtain security clearance from the telecoms ministry before placing any equipment purchase order.
Ghosh said ZTE was "strongly looking" at setting up a manufacturing plant in India in an attempt to allay concerns of the Indian authorities.
A Huawei India unit spokesman also said the firm was considering setting up a manufacturing facility in India.
The Chinese equipment issue has stirred a row within the government, with dissenting views on whether to impose such strict rules for telecoms imports. Some worry that the dispute could dampen booming trade between India and China.
Prime Minister Manhoman Singh censured a high profile minister this week for comments made in Beijing criticising the government's "paranoid" attitude towards Chinese companies and investments.
China's second largest wireless equipment maker would take a series of measures, and may set up a manufacturing plant in India, to allay the security concerns of Indian authorities.
India's telecoms market has come under the spotlight after persistent media reports that New Delhi had banned network gear made by companies from neighbour and political rival China because of security fears.
The government has denied that any country-specific ban has been imposed but says imports of such equipment need security clearance.
"We have no formal communication but what we have learnt from operators is that certain companies including ZTE have not met security tests," ZTE's India unit Chairman D.K. Ghosh told reporters.
"ZTE fully understands and respects the security concern of India government and will unconditionally adhere to the policies and relative requirements of the India government," ZTE Corp's India unit said in a separate statement.
But ZTE India added: "We hope to receive the same equal treatment that other manufacturers can expect in India."
Huawei Technologies, China's leading telecoms gear maker, and ZTE already supply Indian carriers and have given global rivals, including market leader Ericsson, tough competition in the booming market.
Ghosh said about $300 million worth of orders to be placed by operators in India with various telecoms equipment makers may have been stalled because of the security clearance issue.
Chinese companies have stepped up a charm offensive in India following concerns about entry restrictions, especially as foreign equipment makers want to sell third-generation equipment to operators. 3G networks will be launched later this year and will require the procurement of billions of dollars in equipment.
ZTE's senior management will meet India's Home (Interior) Secretary G.K. Pillai on Thursday to discuss the security concerns, Ghosh said.
The Indian government has made it mandatory for telecoms firms to obtain security clearance from the telecoms ministry before placing any equipment purchase order.
Ghosh said ZTE was "strongly looking" at setting up a manufacturing plant in India in an attempt to allay concerns of the Indian authorities.
A Huawei India unit spokesman also said the firm was considering setting up a manufacturing facility in India.
The Chinese equipment issue has stirred a row within the government, with dissenting views on whether to impose such strict rules for telecoms imports. Some worry that the dispute could dampen booming trade between India and China.
Prime Minister Manhoman Singh censured a high profile minister this week for comments made in Beijing criticising the government's "paranoid" attitude towards Chinese companies and investments.
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