India's government has reportedly imposed a total ban on imports of telecoms network equipment from China - turning an informal disapproval into a formal ban. According to a report in the Hindu Business Line, the order was sent out by the Department of Telecom (DoT) on Tuesday to some of the operators that were planning to buy equipment from Chinese manufacturers.

The government had previously banned imports of phones that lack a unique IMEI serial number, the bulk of which coincidentally were supplied by Chinese manufacturers. The ban on supplies of network infrastructure are claimed to be due to security concerns, which have always been denied by the Chinese vendors.

India's state-owned operator, BSNL was previously told by the government to drop China's Huawei from a short list of suppliers for its network in the regions closest to Pakistan, because intelligence officials were unhappy with the vendor's entry in the sensitive area.

The ban on infrastructure imports if confirmed would be a serious blow to ZTE and Huawei, both of whom had been expected to pick up contracts when the ongoing 3G license action is concluded. However, the operators may also lose out as the competition from the Chinese vendors had been driving down the cost of European sourced network infrastruture.

Both Huawei and ZTE are boosting their Indian factory capacities. As the prime concerns have been that the vendors would install "back-doors" into the network software, it seems likely that the ban would also apply to equipment assembled in India though.