NEW DELHI: The Indian government is reportedly preparing to restrict the use of Chinese-made surveillance equipment in the country, particularly following the recent coordinated pager explosions in Lebanon. Sources indicate that the government intends to expedite guidelines that favour local vendors in the surveillance market, effectively sidelining Chinese manufacturers.
The Indian government is expected to change its policies to strengthen national security and safeguard sensitive information. By prioritising the purchase of local products, the government aims to support Indian companies and decrease dependence on foreign suppliers, especially those from China.
Following recent pager explosions, the Indian government is set to conduct a comprehensive evaluation of the critical sourcing of specific components and segments within the supply chain for surveillance equipment. An industry source revealed that this assessment is part of broader efforts to enhance national security.
The anticipated policy changes concerning surveillance cameras are expected to take effect on October 8, creating new opportunities for Indian companies to strengthen their position in the market. This move aligns with the government’s goal of prioritizing domestic vendors and ensuring that only products from “trusted locations” are utilized in sensitive surveillance systems.
As the government focuses on securing the supply chain, Indian firms stand to benefit from the shift away from foreign manufacturers, particularly those from China, amidst rising security concerns.
Although gazette notifications outlining these guidelines were issued earlier this year in March and April, the government’s response has intensified following the incidents in Lebanon, which have raised significant security concerns. The new regulations will permit only products from “trusted locations” to be sold in India, effectively eliminating many Chinese manufacturers from the market.
Market Dynamics and International Precedents
Companies such as CP Plus, Hikvision, and Dahua currently lead the Indian surveillance market, together controlling more than 60 per cent of the industry. According to Varun Gupta, a research analyst at Counterpoint Research, the Chinese companies Hikvision and Dahua will need to make substantial improvements in their localization strategies and increase their investments in research and development to comply with upcoming guidelines. This shift in policy could significantly impact their operations in India as the government prioritizes local vendors for surveillance equipment.
The Indian government’s policy shift to limit Chinese surveillance equipment mirrors recent actions by the United States, which banned products from Hikvision and Dahua in November 2022 due to “unacceptable risks to national security.” The U.S. Federal Communications Commission (FCC) identified these companies as potential threats, raising concerns that their technology could be used for espionage.
In response to these security concerns, India has shown a preference for European suppliers, particularly Bosch, over their Chinese counterparts. Industry insiders note that Bosch’s products are approximately 7 to 10 times more expensive than those of Chinese manufacturers. This trend indicates a growing emphasis on prioritizing security over cost in the procurement of surveillance systems, reflecting a significant shift in India’s approach to national security and technology sourcing.
A “trusted location” refers to a manufacturing site where the Indian government can monitor the entire production process and ensure there are no embedded vulnerabilities or data leak potential in the equipment. Although there is no current plan for a “rip and replace” policy, it remains a possibility for the future. The concept of a “rip and replace” policy, which would involve removing existing surveillance equipment from untrusted suppliers and replacing it with products from approved vendors, has been mentioned in discussions surrounding the Indian government’s new guidelines on surveillance systems. However, as of now, the Indian government has not officially announced any immediate plans to implement such a policy.
Earlier this year, the Indian government issued two gazette notifications that set the stage for major changes in the procurement of surveillance systems. These notifications emphasize the promotion of domestic products, marking a significant shift in India’s approach to security. This initiative is viewed as a vital move to strengthen national security while simultaneously supporting the local manufacturing industry under the “Make in India” campaign. By prioritising homegrown products, the government aims to reduce reliance on foreign suppliers and bolster the capabilities of Indian manufacturers in the surveillance sector.
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