India Tightens Security on Chinese IoT Modules Amid Data Risks

• Chinmay
• December 16, 2024
• India, Internet of Things, News
• Chinese imports, cybersecurity, India-China relations, IoT market growth, IoT modules, national security directive, Smart meters, telematics
• 0 Comments

India is ramping up security measures to regulate the influx of Chinese Internet of Things (IoT) modules that currently dominate the domestic market. Concerns over data vulnerabilities and the potential for foreign state actors to access sensitive information have put these modules on the government’s radar. This development echoes India’s previous actions, such as restricting Chinese apps and telecom equipment, and could significantly impact the applications of IoT modules in areas like smart meters, point-of-sale (POS) systems, and telematics.

One of the last unchecked components in telecom networks, IoT modules enable devices to connect wirelessly to the internet. These modules, widely supplied by Chinese firms such as Quectel, Neoway, and Simcom, hold over 80% of India’s market share, according to Counterpoint Research. Their cost competitiveness has made them the preferred choice for various IoT applications, but they now face scrutiny due to heightened national security concerns.

The government is considering applying the National Security Directive on Telecom to the IoT ecosystem. This follows a push for tighter regulations, which previously targeted other telecom equipment and surveillance cameras. Lt Gen MU Nair, National Cyber Security Coordinator, emphasized the need to secure IoT devices to prevent breaches of critical infrastructure.

Market Implications

India’s IoT ecosystem has been growing rapidly, spurred by 5G adoption, digital transformation, and government-led initiatives like the smart meter program. Smart meters, POS sound boxes, and automotive telematics make up two-thirds of India’s IoT market, with demand growing since 2021.

While Chinese vendors have a stronghold in this sector, global competitors like MediaTek and Qualcomm are also eyeing the market. MediaTek, in particular, has stressed its commitment to delivering secure IoT systems that comply with local manufacturing and regulatory requirements.

Statista estimates India’s IoT market revenue will grow by 16.56% annually, reaching $49.82 billion by 2029. Despite this growth, reliance on Chinese suppliers remains a concern due to their involvement in critical infrastructures like telecom and industrial IoT networks.

A Step Towards Self-Reliance

The government’s regulatory measures align with India’s broader goal of reducing dependence on foreign technologies and fostering self-reliance under the Atmanirbhar Bharat initiative. Efforts to boost local manufacturing and ensure data security are critical steps in this direction.

India’s tightening of security on Chinese IoT imports not only highlights concerns about national security but also underscores the need for diversifying supply chains. With the IoT sector poised for exponential growth, ensuring robust security frameworks will remain a top priority for India.