The chief financial officer of China's global telecommunications giant Huawei has been arrested in Canada and faces extradition to the United StatesFRED DUFOUR/AFP/Getty Images

India is unlikely to follow the US call to ban the import of 5G equipment from Chinese telecom equipment maker Huawei over spying fears, a report says.

This marks a reversal of an earlier opinion that there is enough ground to be cautious about the Chinese company.

Indian decisions on Huawei will be watched closely because of the market size and its exponential growth potential. Moreover, reports on Huawei assume significance in the context of the huge diplomatic row involving China, Canada, and the US over a case against Meng Wanzhou, Huawei chief's daughter and official.

The Indian government does not want to keep out the telecom equipment maker on the ground of security, especially because its rivals also source key components from China, media reports said citing government sources.

Telecom secretary Aruna Sundararajan hinted earlier that Huawei might be excluded from a list of firms invited for the government's 5G trials. However, Huawei clarified later that there was no problem in its attending the trials. The company said the Department of Telecommunications (DoT) had invited it to participate in the programme.

"Only Australia, New Zealand and Japan have followed (the US call). Germany and the European countries haven't banned Huawei. Why should we ban?" the website quoted a senior government official as saying. "To top it all, most telecom equipment providers source their supplies, especially chips, from China. The equipment providers themselves might not know if there is spyware in their products."

Telecom equipment providers like Ericsson of Sweden and Nokia of Finland source parts from China. Both the companies claim they have tight controls and security protocols in place.

"So, we don't really have a case against the Chinese equipment makers," the report said citing the official. India has launched a programme to established advanced telecom equipment testing laboratories. There is already a legal framework that allows the government to test any telecommunication equipment, imported or domestic.

Indian mobile services providers have supported Huawei, which has been winning a price war in the Indian market against mainly European rivals.

Though not officially acknowledged, reports suggest, Indian authorities have been wary about the use of Chinese equipment in the telecom sector. New Delhi kept out many Chinese makers from government bids for some time fearing the presence of embedded spyware in the firmware. The equipment makers have also come around to accept stringent testing of their equipment and opening their manufacturing facilities to official scrutiny.