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India's 5G Invitation to Huawei May Signal Turn in Bilateral Economic Ties

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Amid concerns in the West about the operations of Chinese telecom giant Huawei, the company has been allowed by India to participate in its 5G trials, the Times of India reported.

If this report is true, the Modi administration's invitation will help increase strategic mutual trust between China and India. When New Delhi initially sent out invitations to global 5G giants, Chinese companies were not invited. We believe some efforts have been made by the Indian government to provide more equitable treatment to Chinese firms in its 5G market.

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The arrest of Huawei CFO Meng Wanzhou has been viewed as a political conspiracy to undermine the Chinese telecom giant in global 5G markets. At a time when Huawei is going through a rough patch in the Western world, whether New Delhi's changed attitude is a silent signal of support for China is uncertain. However, the Chinese public — and companies eyeing opportunities in India — can take note of New Delhi's efforts and sense sincerity from the country.

Although Sino-Indian relations have improved slightly since 2017 when a military stand-off soured bilateral ties, some Chinese investors feel uneasy, worrying that they may lose money if bilateral relations cool. New Delhi's changed attitude toward Huawei is good news for these investors. As the two countries enhance their strategic mutual trust, India will likely receive more foreign investment from China.

Chinese investment will help make the digital sector a major growth driver in the emerging economy. India has strong potential in its shift toward a digital economy and its cooperation with Chinese companies will help the South Asian country embrace advanced digital technologies.

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Huawei claims to be leading the world in commercial 5G contracts, with a large number of patents and key underlying technologies for 5G. Although India's changed attitude comes at a sensitive time, there is strong economic logic behind New Delhi's decision. The invitation to Huawei is a form of economic cooperation, rather than a political deal.

5G cooperation between China and India is in its infancy, and there are still many challenges that need to be addressed. It is understandable that some Indian people have concerns about Chinese 5G investment. The Western world can also put pressure on New Delhi, but we believe that strategic mutual trust can help the two countries find the proper solution and promote their digital economies to achieve a win-win result.

This article was originally published in Global Times.

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