Huawei plans $500m investment in India

Published on January 11, 2010 by connie | This story has been viewed 1,079 views

Under the pressure of India’s latest heavy tax policy, Huawei has to make appropriate adaptations.

Media quoted Max Yang, CEO of Indian Branch of Huawei last Friday that Huawei plans to manufacture communication equipments in India and proposes 500 million dollars investment for the research and development center within five years. After receiving the application of India’s communication equipment manufacturer ITI, Indian Government started imposing anti-dumping tax of utmost 236% for the SDH communication equipments imported from China on December 8, 2009, in which Huawei need to pay 50% anti-dumping tax.

India’s local corporations have little advantages on the research and production of communication equipments, however, India is a hotly contested spot of the global telecommunication equipment manufacturers, which aggravate the local companies’ difficulties. ITI Corporation, a state-owned enterprise of India with a history of 60 years, formerly focused on the production of fixed-line telephone equipments and then started producing mobile communication equipments. Since 2007, a great deficit has occurred in the company. ITI sent out invitation in June 2009, hoping the potential buyers could purchase the stock rights of three of the six factories in India.

In November 2009, the investigation group of Huawei’s headquarter in China visited ITI’s factory to decide whether to participate in the bidding of the stock rights. ITI Company hopes to adopt the measure of joint venture to operate the factory in India. Except for Huawei, Intel, Alcatel-Lucent, Samsung and Hitachi also show their interest on ITI’s stock rights.

Max Yang said that Huawei has not made final decision on the cooperation with ITI, “ITI is one of plans that we consider. However, we also have other plans.” He added, to Huawei, manufacturing communication equipments in local India will help itself evade the anti-dumping sanctions of Indian government and more dissatisfactions of Indian market could be incurred if Huawei continue to sell communication equipments produced in China to Indian buyers only through export.

,Huawei currently has 4000 employees in India, including the 2000 employee at the research and development center in Bangalore. According to the plan in December 2009, Huawei will increase 2000 employee in India market in the future 18 month to 2 years. But Max Yang said Huawei’s Indian Company plans to increase 5000 within 5 year.

Spokesman of Huawei’s India Company earlier released that Huawei has realized sale value of 1.7 billion dollars in Indian market. Max Yang said Huawei will maintain its revenue in India stable in 2010 and will increase obviously in 2011, but he only said “the sale revenue is a little higher than 1 billion dollars” instead of releasing the detailed number in 2009.

Shenzhen Post Elaine Contributes to the Story.

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