A penalty of about 100 per cent of the contract value would be imposed on operators found using faulty equipment that has spyware or malware, the government said.

International telecom gear makers keen to do business in India will have to deposit source codes and detailed design of all products and services they sell here into an escrow account in encrypted form. This can be accessed by security agencies and operators in case of an emergency.

All the latest rules would be incorporated in the license agreement of all the telcos with immediate effect.  

The new rules further state that global telecom gear makers like Nokia Siemens, Ericsson, Huawei and Alcatel-Lucent and others who manage mobile networks of operators here must employ Indian engineers only, adding that these gear makers would be given a two-year time frame to comply.

The networks of India’s largest phone firms—Bharti Airtel, Reliance Communications, Vodafone, Tata Telecom and Idea, are being managed by either Sweden’s Ericsson, Finland-based Nokia Siemens, China’s Huawei or Paris-headquartered Alcatel-Lucent.

The new rules also make it compulsory for all the telcos “to allow the government officials to inspect hardware, software, design & development, manufacturing facility and supply chain and subject all software to a security/threat check at the time of procurement and every two years thereafter, at the time of discretion of the telecom service provider.”

Since February 10, the government has blocked over 450 equipment orders worth $3 billion placed with Chinese vendors citing security concerns, slowing down the expansion plans of all operators. The new norms will also enable telcos to place orders for 3G networks following the recent allocation of 3G bandwidth to successful bidders via an auction process.

According to the amendments, telecom service providers will also have to form an organizational policy on security and management of their network. The policy will have to be submitted to the government within 30 working days from the date of the amendment to the UASL license conditions.