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With increasing security concerns, Government to review Chinese IT imports

trade relations between India and China
Government will review the import of electronics and information technology products from China due to increasing concerns over security

As tension on the border worsens amid the India-China standoff over Doklam and concerns about trade imbalances and security increases, Government will review the massive import of electronics and information technology products from China.

Many of the devices transmit, or store, data back into Chinese servers, which could pose a security risk. Also, online transactions using many of these devices and platforms can be tracked back to Chinese servers, which can create security issues for the country at a time of heightened tension on the border.

There has been a growing clamour for import restrictions and other curbs on such products, which currently constitute a huge chunk of shipments from across the border. The growing engagement of Chinese companies within India’s burgeoning electronics and IT industry worth nearly $22 billion has sounded alarmed bells within the government, especially as it is felt that much of this can be used to gain unlawful access to critical information about individuals, businesses, and government set-ups. Chinese companies have become almost a backbone to India’s massive requirements in the manufacturing of electronics, especially when a large part of the critical components and finished goods are imported. Chinese companies hold substantial stakes in some of the country’s largest online marketplaces.

IT and law minister Ravi Shankar Prasad recently held a top-level meeting to assess the situation with regard to the Chinese engagement in India’s electronics and IT sector, according to sources. Prasad is understood to have asked ministry officials to make an assessment of India’s vulnerability when it comes to goods from China.

The Indian government’s movement towards digitalisation of services and trade and the manifold increase in online transactions has also added to security concerns, which have reached the highest echelons of government. There are increasing concerns about the preparedness of the security apparatus, especially as there are fears that electronics, online trade platforms, and finished goods can be tapped into for procuring sensitive information.

India had a trade deficit of nearly $52 billion with China last fiscal, and the country is now seeking greater market access in the neighbouring country for its products and services. The government is pushing the local manufacturing by many benefits. The “Make in India” policy has been focusing on this aspect and the government expects the turnover of the digital, communications and IT industry to grow nearly fourfold to $1 trillion by 2022 against $280 billion currently.

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