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Import of Chinese electronic goods reviewed in the light of security situation

The central government has set in motion an elaborate process to review import of electronics and information technology products from China due to concerns over security and data leakages in the light of deteriorating relations between the two countries following standoff near the border

There has been a growing clamor for import restrictions and other curbs on electronic products, which currently constitute a huge chunk of shipments from across the border. The review in all likelihood may signal the onset of a strategic trade war as tension on the border worsens and concerns about trade imbalances and security increase.

The growing engagement of Chinese companies within India's flourishing electronics and IT industry is worth around 22 billion US Dollars according to a recent study by industry chamber Confederation of Indian Industries. The Chamber has sounded alarm 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.

"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, "Communication has already been sent to industry players for their views and assess their preparedness in protection of data and critical information."

The current move towards digitalisation of services and trade and the manifold increase in online transactions have also added to security concerns, which have reached the highest echelons of government.

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.

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. These include components for products such as mobile phones, medical equipment, telecom network gear and devices and sensors linked to the Internet of Things (IoT).

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.

India's large and uneasy trade imbalance with China is another trigger for the exercise. It is felt the government should focus, "and insist", on faster indigenization to tackle the issue. India had a trade deficit of nearly 52 billion US Dollars with China last fiscal, and the country is now seeking greater market access in the neighboring country for its products and services.  

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