'China part of concern': India's CCTV crackdown over spying fears hits global giants like Hikvision, Xiaomi

Foreign and domestic CCTV camera manufacturers are clashing with Indian regulators over sweeping new cybersecurity rules that require testing of surveillance equipment in government labs before sale, according to internal documents, emails, and interviews reviewed by Reuters.

The policy, effective from April 9, mandates that internet-connected CCTV devices undergo mandatory certification — including possible source code submission and factory audits — before they can be sold in India.

The rules apply to major global brands like China's Hikvision and Dahua, South Korea's Hanwha, US-based Motorola Solutions, and India's CP Plus. Officials argue the policy is essential to secure national surveillance infrastructure, especially given concerns over Chinese intelligence laws and past incidents of espionage risk. "There's always an espionage risk,” said Gulshan Rai, India's former cybersecurity chief. "Anyone can operate and control internet-connected CCTV cameras sitting in an adverse location. They need to be robust and secure."

Despite pushback from industry players, the Indian government has refused to delay implementation. During a meeting on April 3, officials told executives from 17 companies that the policy "addresses a genuine security issue" and would be enforced without exception.

Hanwha's South Asia director Ajay Dubey warned the IT ministry in an email that "millions of dollars will be lost from the industry, sending tremors through the market." Companies cited issues such as insufficient lab capacity, scrutiny over source code, repeated factory audits, and delays in approvals. As of May 28, 342 applications were pending, with only one approved from a foreign brand.

Chinese companies appear to be facing additional hurdles. Xiaomi claimed in an April 24 email that Indian labs requested extra documentation from its China-based contract manufacturers due to "internal guidelines" for firms from countries sharing land borders with India. China's foreign ministry responded by urging India to provide a “non-discriminatory environment” for Chinese firms.

New Delhi's concerns stem partly from global developments. The US banned sales of Hikvision and Dahua in 2022 over national security risks. Britain and Australia have also restricted China-made devices. Likewise, India "has to ensure there are checks on what is used in these devices, what chips are going in," a senior Indian official told Reuters. "China is part of the concern."

The Indian official cited Israel's remote detonation of tech equipment in Lebanon and reports of Chinese solar inverters containing unexplained communication modules as further justification for a robust domestic testing mechanism.

The Standardization Testing and Quality Certification Directorate (STQC), under the IT ministry, is the agency tasked with certification. It currently has 15 labs that can process 28 applications concurrently, although the current application load has overwhelmed capacity. The public sector represents 27% of India's CCTV demand, while private and residential use accounts for 73%.

Retailers are already feeling the pinch. “It is not possible right now to cater to big orders,” said Sagar Sharma, a CCTV shop owner at New Delhi’s Nehru Place market. “We have to survive with the stock we have.” Sharma said his revenues have fallen by 50% since April.

The Indian CCTV market, worth $3.5 billion in 2023, is expected to double to $7 billion by 2030. Despite the push for domestic alternatives, about 80% of CCTV components are still sourced from China.

(With inputs from Reuters)