In a move that could allay apprehensions of Chinese investors, Union home ministry has given security clearance to a long-pending proposal of the Red state’s telecom major Huawei to set shop in Tamil Nadu.
The company’s proposal for setting up a unit for electronics, telecom hardware and support services including trading and logistics activities was pending since December, 2013.
The security clearance came two months after Prime Minister Narendra Modi’s visit to China where he assured an easy investment environment for Chinese companies.
With an eye on attracting the Chinese investment in India, Union home ministry has already put in place a ‘transparent and consistent’ policy for security clearance for companies coming here from across the Himalayas.
“Earlier we just used to deny security clearance to majority of Chinese companies. But now with certain conditions we will start clearing proposals from them. Security clearance to Huawei Telecommunications (India) Private Limited is step in that direction,” said a home ministry official requesting anonymity.
According to the official the security clearance is subject to conditions that the company will have to reserve critical posts like officer-in-charge of technical operations and chief security officer for Indian nationals. And if the company wants to appoint foreign nationals as its chairman, managing director, chief executive officer and chief financial officer, they will have to seek further security clearance from the home ministry.
The department of telecom (DoT) and department of industrial policy and promotion (DIPP) have been asked to convey these conditions to Huawei for their compliance.
All these conditions will apply on all further investment proposals coming to the home ministry for security clearance, said sources.
The Huawei unit will come up at the Special Economic Zone, Sriperumbudur in Tamil Nadu at a cost of Rs 25 crore.
Besides, the DOT will also draw up mandatory security parameters in addition to technical, quality and interface parameters to enable the definition of clear security standards for technical equipment relating to network system and set up state-of-the-art testing facilities within one year to check foreign equipment entering the Indian market through direct and indirect routes, said sources.
“These are additional security measures,” said the official.
Huawei already has a manufacturing unit for optical network transmission systems in Chennai but it is totally export oriented.