Indian Government Restricts PRC Manufacturers From Public Projects

By Robert Wren Gordon, Published Aug 04, 2020, 10:50am EDT (Info+)

In a move that mirrors the U.S. government’s ban on Dahua and Hikvision products, the Indian government has restricted PRC manufacturers such as Dahua and Hikvision from bidding on Indian government projects.

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Inside this note, we examine:

  • Rising Tensions Between India and the PRC
  • Amendments to General Financial Rules 2017
  • Impact on PRC Manufacturers
  • Dahua: No Comment
  • Hikvision: No Comment
  • More Bans Forthcoming?

Rising ******** ******* ***** *** *** ***

***** ******** ******* ***** *** *** PRC **** **** **** **** **** a *******, ******** ******** ****** ** ** mid-June, **** ******* ***** ******* ****** *** *** servicemen*** ** *** ****** ** ** Indian ********, ** **** ** * still-unconfirmed ****** ** *** **********.

** **** *,**** ******** * *************** *** ***** ********** ***** ****** Hikvision ** *****, ***** ****** ******* as ***** ********* ***** ******* *******, or ***** *********.

Amendments ** ******* ********* ***** ****

** **** **,*****'* ******* ***************** ******** *******, ** **********, ** its ******* ********* ***** **** (*** 2017), ***** ****** ******* ** ****** projects.

** **** ** *** ******* ********'* move, "******* **** ********* ***** ***** a **** ****** **** *****" (*.*.**********, ******, *****, *****, ********, *** the ***) **** **** ** ******** **** the **************** *** ********* ** ******** *** Internal *****(*****) *** ****** "********* *** ******** clearance **** *** ********** ** ******** and **** *******" ****** ***** ******** to ***. ********* ******* ********'* **** ** ***** release** *** ************ ***** ** ***** that *** **** ** ****** ** national ******** ********.

*** ********** ** ***** ***** ******* the ******* ********* ***** **** ** enable ********** **restrictions ** ******* **** ********* ***** ***** * **** ****** **** ***** ** ******* ** ******* ** *****, or matters directly or indirectly related thereto including national security. The Department of Expenditure has, under the said Rules, issued a detailed Order on public procurement to strengthen the defence of India and national security. [emphasis added]

*** **** **** ** ****** ******* Ministry ***** ******** *** ***************.

Impact ** *** *************

*** ********** ** *** ****, ********* immediately ** ** ***** *********** ** July **, **** * ******, ******* impact ** **** ***** ********* *** Dahua's ****** **********, ***** ********** ***** Private ******* (***** *****).

******** *, ***** ***, ****** *** of *** ******* ********'* ***** ******** GFR **** ****** "****** **** * country ***** ****** * **** ****** with *****" ******* ** * ***** degree ** **************.

***. "****** **** * ******* ***** shares * **** ****** **** *****" for *** ******* ** **** ***** means: -

*. ** ****** ************, *********** ** registered ** **** * *******; **

*.A ********** ** ** ****** ************, *********** ** ********** ** **** * *******; or

*.An ****** ************* ********** ******* ******** ************, *********** ** ********** ** **** * *******; or

*.An ****** ***** ; or

*.An ****** (** *****) ***** ** **** ** ******; or

*. * ******* ****** *** ** a ******* ** **** * *******; or

*. * ********** ** ***** ******* where *** ****** ** *** ********** or ***** ******* ***** ***** *** of *** *****[.] [******** *****]

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****** **** ***** ****** *** "****** (or *****) *****" **** ***** ***** or ***** ********* ***** ******* ** bid *** ****** ******** ** ***** behalf *** ************** *** ******* ******* pursuant ** *** *****:

**. ** ***** *********, ********* ******* contracts, *********** ***** *** ** ******* to ***-******** ***** ** *** ********** from * ******* ***** ****** * land ****** **** ***** ****** **** contractor ** ********** **** *** ********* Authority. *** ********** ** "********** **** a ******* ***** ****** * **** border **** *****" ***** ** ** in ********* * ***** [****** ** the **** **** ***** ***** ** Annexure *, ***** ***, ****** ***]. This ***** *** ***** ** ***-********* already ******* ** ** ****** *** date ** **** *****.

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Dahua: ** *******

**** ******* *** ** **** ***** HQ *** ***** *****; *******, ******* responded ** *** ******** *** *******.

Hikvision: ** *******

**** ******* *** ** **** ********* and ***** *********. * ********* ************ declined ** ******* ***** ***** ********* did *** ******* ** ****'* ******* for *******.

More ************ ***********?

***** *** *.*. *** ***** ****** the **** ********* ** **** ***** such ******** ****** ******* *** ***** PRC *************,****** ** *********** **** ********* ******* over ******************* ********** ********** ******** **** *********** Hikvision ********.

***********, ** *** ******, ***** ** no ********** **** *** ************* **** being ********** ** *********** ** *********, Canada, ******, ** ***** ******* ** the **** ****** ** ** *** U.S. *** *****.

UPDATE: ***** ****** ********** ***** ************ ******* ***** ***** *** ***** ********* "**** *******" *** "********** *********** *** ****** *********"

**** *********** ** *****-***** ********** ** Dahua ***** *** ***** *********, *** had *** ********* ** ***.

****: ** *** ******* **** *** amendments ** *** **** **** ****** Prama ********* *** ***** *****? ** so, ***?

**********: **********, **** ***** ** ***** to ** *** ***** **** ******* favouring ****** ****** *** **** **** [a] ******* ***** ** [***] **** in ***** ********** ** [***] ********** of *****. ** *** [*] **** awaited *** ****-****** *********, ***** **** change *** ****** ** [***] **** industry ** *****. [***] ********** *** also ******* ***** ******** ************ ** come ******* *** **** ***** *********** on ********* ********. *** *** ** TV *** ** ****** ***., ** [an] ******* ** ****. ***** *** serious **********[*] ***** ** ** *** government ******* ** [***] **** **** also, ***** **** *********** **** *** further ********** ** ** *** ******* import[s] **** *****, ****** ******* ** local *************. ** ****** **** ******* brands...who **** ******* *********** ********** ***** and *** ******** ******** **** [***] governmentt ****, ** ******* [*] ***** ecosystem ** ********** *** ****** *****, to ********** ***** *************. ******* ***** on ***** *&* *** ******* *********** is ******* ******** **** [***] **********, with ****** ************* ****** *******.

****: ** *** ******* **** *** amendments ** *** **** **** ****** opportunities *** ****** *********? ** **, why?

**********: ** ******* ******, [***] ********* will ****** ********** *********** *** ****** companies, *** *** ** ******** *** Chinese ********* ** ***** ****** ****, where **** **** ***** * *** preference **** ****** ** ******** ******* and ***** *** ******** ********* ** scale, **** **** **** ** ******* in ******** ******* ***.

****: **** ****** ******* (*.*. ****** Electronics ******* (***), *** ******** ********* cameras ** ***** ***** **** ******) still ** **** ** ******* ***** India *** ***** ********* *******/******** ** their **** *** ****** ******* (******* GEMs ** *********)?

**********: ****** ******* **** ***, ****** will ***** ** ***** **** ********* or ***** **** ** *******, ** BEL *** ** **** * *** of ****** *** ********* ***** **** Delhi **** ******. ** ********** ***** working, ***** * ****** ******* *******. That's ***, *** ***** ** ** Delhi **** ******* ** *.* ***** [140,000] *******, *** **** ***** **** CP **** *** *** ****. ********* other *** ********** ******* **** ********, Delhi ****** *******, ****/ ***** ***** Cities ***., *** ** ******* **** CP **** ****.

Comments (12)

Undisclosed Manufacturer #1

08/04/20 07:15pm

This is not about the quality of the cameras or security of the transferred data this is only politics nothing else. India is big market and they can do such a thing as block manufacturers from PRC

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John Honovich

IPVM | In reply to Undisclosed Manufacturer #1 | 08/04/20 07:19pm

this is only politics nothing else

When China does the same type of thing to foreign video surveillance providers inside of China, what do you consider that?

My point is 'politics' was introduced by China many years ago and, for example, your employer benefited from this immensely. However, I have never seen any Dahua or Hikvision employees speak out against politics inside of China blocking out India, US, EU, Canada video surveillance companies.

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Undisclosed Manufacturer #1

In reply to John Honovich | 08/04/20 07:31pm

However, I have never seen any Dahua or Hikvision employees speak out against politics inside of China blocking out India, US, EU, Canada video surveillance companies.

Of course they would like to keep the job and not get arrested .... so this is clear. For me this is "banana war"

This is not only in our industry..... Go to UAE and try to sell something from Isreal :)

With all the respect to you John, you are real professional with many years of experience, I think IPVM is focusing too much on this issues. Just my opinion.

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John Honovich

IPVM | In reply to Undisclosed Manufacturer #1 | 08/04/20 07:40pm

I think IPVM is focusing too much on this issues. Just my opinion.

Definitely people can have different opinions on how much to focus on this topic.

In terms of IPVM, we see this as an issue of justice and ethics - the PRC has spent most of the last decade blocking out foreign companies, this was unjust and speaking out against it is the right thing to do.

And, more practically, a lot of people in the industry are reading about this, so while, for sure, there are people like you understandably think this is too much, overall, there is interest.

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Robert Wren Gordon

| IPVMU Certified | 08/05/20 12:18pm

UPDATE: This report has been updated to include the interview and reaction of an India-based competitor to Dahua India and Prama Hikvision.

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Undisclosed Integrator #2

08/05/20 02:44pm

So, the interview posted here is from CP Plus (Aditya Infotech). Who is nothing but the next wrap-up around Chinese products such as Dahua etc? I suggest IPVM should reach to the REAL Indian OEM (if they get one genuine).

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Robert Wren Gordon

| IPVMU Certified | In reply to Undisclosed Integrator #2 | 08/05/20 02:50pm

Thank you so much for taking the time to read the post and the interview.

Please feel free to reach out to me at rgordon@ipvm.com if you have contacts at Indian video surveillance manufacturers who might be interested in speaking to IPVM. The focus of my role within IPVM is expanding our international coverage and I am always looking to connect with industry professionals, especially professionals who have time to contribute quotes/share suggestions for articles.

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Undisclosed #4

In reply to Undisclosed Integrator #2 | 08/06/20 12:31am

True, not to mention that aditya is dahua largest distie in India is misleading. they operate 2 companies in parallel, one for dahua products, one for cp

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Christopher Halvorson

@securitybaer
IPVMU Certified | 08/05/20 03:06pm

I'm so glad that these companies are getting hosed. They were given a fair shot of being decent and moral and they passed, so they should get bit in the ass.

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Undisclosed Manufacturer #3

08/05/20 07:23pm

Long post but since its a matter of 'justice & ethics' :)

As someone who has worked in the Indian Security Industry for over 15 years, who does not work for either Hikvision or Dahua and works very closely with the Govt. on Public Projects, here are my comments -

This has NOTHING to do with HikVision or Dahua. I can see how you probably made the connection but honestly I did not expect this from IPVM.

I have to say you have not really understood the amendments (I do not blame you since you may not be well versed with the nuances of such fine 'politically appeasing' wordings in such RFPs/Govt notifications, etc. in India).

According to the notice: (key words highlighted)

III. "Bidderfrom a country which shares a land border with India" for the purpose of this Order means: -

a. An entity incorporated, established or registered in such a country; or

b.A subsidiary of an entity incorporated, established or registered in such a country; or

c. An entity substantially controlled through entities incorporated, established or registered in such a country; or

d. An entity whose beneficial owner is situated in such a country; or

e. An Indian (or other) agent of such an entity; or

f. A natural person who is a citizen of such a country; or

g. A consortium or joint venture where any member of the consortium or joint venture falls under any of the above[.] [emphasis added]

This basically means - Hikvision/Dahua/Infinova (PRC) or Hikvision/Dahua/Infinova (India) cannot DIRECTLY bid for a public project in India, nor they can be a part of ANY CONSORTIUM/JV that bids for a public project in India.

Guess what - they NEVER DO. OEM's are NEVER the bidders in public projects in India. Public projects are usually bid by large companies who in general meet all the qualification requirements (e.g. Larsen and Turbo, Johnson Control, Siemens, etc.), once they are awarded a project, they go with the OEM who gives them the cheapest solution and then route the order through their distributor who does the installation. The OEM is ALWAYS in the background. Yes a customer may show his displeasure if lets say Hikvision or Dahua was offered but they usually concede on the fact that other OEMs (Axis, Bosch, IndigoVision, Pelco, etc.) will come no where close to the price of Hikvision or Dahua.

In India if there is Tender published or an RFP released - an OEM has worked on it, he has designed it and carefully worded it so even thought 3 others will qualify - he will win.

I have seen RFPs where approved makes are - Hikvision, Pelco, Axis & Bosch, guess what we know who's going to win that one.

I have seen RFPs where its mentioned in the RFP that the 'Country of Origin cannot be China or Taiwan' but those are generally customers who really understand what they want, who probably hired a consultant to write the spec or favor an OEM apart from Hikvision/Dahua.

You mention

While the Finance Ministry's July 23 order does not necessarily ban Dahua India or Prama Hikvision from bidding on public tenders, both companies are now required to undergo a DPIIT review and obtain Indian government political and security clearances prior to being allowed to bid on further public projects.

Where in the amendment does it mention 'both companies' - not sure I read it anywhere.

Your article also mentions

In light of the current environment, with one of India's most widely acclaimed journalists dedicating airtime [1] [2] in July to the "threat" posed by Hikvision and the local "boycott China" movement showing no signs of abating, it is doubtful that Dahua India or Prama Hikvision, which in the past supplied CCTV cameras to India's capital in Delhi, will be able to bid again for recently scrapped tenders, such as the scrapped Railtel Corp of India Ltd tender that was widely considered as too favorable to Prama Hikvision.

'One of India's most widely acclaimed journalists' - Tch. Tch. do not believe everything you read, especially on his own channels website. Actually all our journalists and news channels claim that. His report could be easily be sponsored for by those who 'benefit the most' hint - CP Plus unveils new campaign on security and surveillance products - Exchange4media

Now obviously someone like CP Plus or Sparsh (another Indian manufacturer of CCTV) will use this amendment (or even your article) to scare customers in falsely believing this is the case - but in all honesty that is not factual.

Unfortunately the CCTV cameras that are 'Made In India' do not come even close to the quality, features, experience (reference projects) to the existing players in the market. Their products are ideally suited for home, small retail, box pushing kind of deals ($50 to $100 range) and one would not generally propose them for an Airport or Metro (yet - maybe in the far future but still a very long road ahead).

We Indians want the 'high quality' and all the bells and whistles' but at Hikvision & Dahua prices.

Sorry but i expect higher journalistic integrity from IPVM.

********************************************************************************************

P.S : This amendment is actually for the Metro Rail industry where bidders were PRC companies. There were 2 Metro projects awarded to them but eventually cancelled and project was retendered.

If you further study this you will realize -

While the first order barred public procurements from countries sharing land-borders with India, the second gave exemptions to certain neighbors whom India offers lines of credit. According to officials mentioned above, they could be neighbors such as Nepal and Bhutan. But, the notifications did not mention names of any particular country or group of countries.

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Undisclosed #4

08/06/20 12:37am

True in every word.

the Indian eco system for security products is almost non existant, they cant disconnect from chinese components and products just yet.

I believe infiniva had some military gov projects before, but not sure what is the situation now.

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Charles Rollet

09/06/21 02:18am

UPDATE: the Indian Navy has ordered removal of all Hikvision video surveillance systems, mandating they be replaced with non-Chinese origin products, according to an "internal communication" obtained by The Week, India's largest English magazine. The memo, authored by the Ministry of Defense's Integrated Defense Staff, stated that even unconnected networks are not secure:

"This loss (data) could be through programmed or coded servers or embedded hardware for wi-fi or SIM-based connectivity, or during maintenance or replacement from the memory/cache of the CCTV and other surveillance systems," the note stated.

The Navy will have to buy cameras through India's Govt e-Market (GeM) which has "removed Chinese origin products from its portal as per the directives of the Department of Promotion of industry and internal trade (DPIIT)", per The Week.

The memo noted that Hikvision India markets "Made In India" (due to its India factory) yet Hikvision is PRC government controlled:

The modules of these cameras systems are supplied by the Chinese firm, however, these products are marketed as 'Made in India', MoD letter claims [...] one of the market leaders in surveillance cameras is Hikvision, which has 41 per cent Chinese government holding and it is operating in India through an Indian company's collaboration

Prama Hikvision, Hikvision's India branch, is 58-percent directly owned by Hikvision itself, per Hikvision's 202 annual report:

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