Lebanon explosions: Indian government’s new CCTV rules means ‘ban’ on these Chinese companies

The Indian government reportedly seems set to restrict the use of Chinese-made surveillance equipment in the country, following recent coordinated pager explosions in Lebanon. Multiple sources familiar with the matter revealed to The Economic Times (ET) that the government is set to accelerate the implementation of guidelines that favor local vendors in the surveillance market.
“In light of the pager explosions, the government will be taking a close look at critical sourcing of certain components or parts of the supply chain,” an industry source told ET.”The government’s policy on surveillance cameras is likely to come into effect on October 8, which will effectively eliminate Chinese players from the market, benefiting Indian companies.”
While the gazette notifications were issued in March and April of this year, sources stated that the government has expedited its implementation and sharpened its focus on security in the wake of the Lebanon explosions. The government is set to fast-track the implementation of guidelines on CCTV cameras, which will allow players from “trusted locations” to sell their products in India.

Chinese companies that government’s new rules will impact

According to Varun Gupta, research analyst at Counterpoint Research, “Currently, CP Plus, Hikvision and Dahua control more than 60% of the market in India and they will have to step up their efforts in improving the localization content in their surveillance portfolio and double down on R&D..
While CP Plus is an Indian company while Hikvision and Dahua are Chinese players. In November 2022, the United States government, through the Federal Communications Commission (FCC), banned the sale of equipment from Hikvision and Dahua due to “unacceptable risks to national security”.

Chinese CCTV companies banned in the US

The FCC declared the companies a threat to national security after concerns that their equipment could be used by China to spy on the US.
Those in the know also said that lately, the Indian government has been rejecting Chinese CCTV equipment tenders and has been preferring European players like Bosch. Notably, it is estimated that Bosch is around 7-10x more expensive than its Chinese counterparts.

Indian government wants CCTVs only from ‘trusted locations’

“The emphasis on CCTVs predates the pager explosions,” another person told ET. “The guidelines on security certification were issued in March and will come into effect in October. It’s less about explosions and more about the potential for data leakage from CCTV cameras, which are installed in sensitive locations and can be used to track people’s movements. The government wants to ensure that only cameras from trusted locations are used.”

What are ‘trusted locations’

A “trusted location” would be one where the Indian government has visibility on the entire manufacturing chain and is convinced that there are no backdoors in the equipment that could leak or take data out. While a “rip and replace” policy is not currently on the table, it remains a possibility for the future.
Of the two separate gazette notifications that came out in March and April, one focused on “Make in India” guidelines for surveillance cameras, while the other addressed the criteria for CCTV certification. The orders from the government laid the foundation for changes in procurement of surveillance systems in India and placed a strong emphasis on promoting domestic products in the surveillance market.