Eyeing opportunities in the fast growing Indian telecom sector, Chinese vendor Huawei on Tuesday announced an investment of $2 billion (about Rs. 9,000 crore) in the next five years to set up an R&D centre, local manufacturing and other activities.

The announcement comes on the eve of Chinese Premier Wen Jiabao’s three-day visit to India starting Wednesday.

“Huawei has been in India for over a decade and is committed to long-term development and cooperation in India. As an integral part of Indian telecom industry development and an active player serving all telecom service providers, Huawei India strives to be the long-term partner for the development of India’s telecom and IT industry and inclusive growth,” Max Yang, CEO, Huawei India, said.

The new R&D campus would be set up in Bangalore, the company said in a statement.

Huawei was struggling to set its footprint in India as the government had raised certain security concerns about foreign telecom companies, including Chinese ones. It was only recently that Huawei was allowed to bid to supply equipment to Indian telecom service providers after it agreed to meet the guidelines, including sharing “source code” and “equipment design”.

The comprehensive five year plan will focus on development, augmentation and cooperation in the areas of local R&D, local manufacturing, technology cooperation with Indian IT service companies, local sourcing, local employment, talent development, and supporting rural education and IT literacy in India, Huawei said.

The company has operations in 19 major regions and employs over 6,000 technical and professional staff across the country. On the R&D front, Huawei has the biggest R&D centre outside China in Bangalore, which was set up in 1999 and now employs 2,000 engineers now. The development of the new R&D campus in Bangalore will increase the current capacity to about 3,000 R&D engineers. Meanwhile, Huawei has recently started its first phase of local manufacturing in Chennai and is further exploring other forms of cooperation in local manufacturing.

According to the plan, the local R&D and manufacturing are being developed with export capacities, besides supporting India’s local industry development, a Huawei statement said.

Huawei recently bagged the order to supply 3G networks to leading service providers in India and is eyeing big business from both private as well as state-owned firms.

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