Chinese CCTV players, Indian MSMEs left in lurch as govt declines deadline extension for key certification

The Federation of All India Information Technology Associations (FAIITA), in a recent letter, sought the intervention of Union Minister for Information Technology Ashwini Vaishnaw and warned that the new STQC requirement puts over 1,000 MSME units in the CCTV manufacturing sector at risk of closure. Moneycontrol has seen a copy of the letter.

The body stated that the immediate compliance requirements may force smaller players out of the market, allowing only a few large companies to remain, which could lead to monopolisation and reduced innovation.

"With over 1,000 MSME factories at risk of closure, the livelihoods of more than 4,00,000 individuals are hanging in the balance. The current challenges — including rising production costs, supply chain disruptions and stringent compliance requirements — are exacerbated by the difficulties in meeting STQC standards without adequate technological support," the body said.

However, TEMA, a body representing telecom and ICT products, supported the Meity decision.

"Cameras, video surveillance are most sensitive to national security and the government has the right to introduce mandatory testing of essential parameters to ensure safety from security risks...there is no case for extension, as sufficient time has already been give," N K Goyal, chairman of the Telecom Equipment Manufacturing Association (TEMA) and President of CMAI, told Moneycontrol.

“To comply with the STQC requirements, one has to own the source code of the product completely. Ensure that image sensors, firmware, all come from trusted supply chains,” an industry executive told Moneycontrol. "If you are sourcing your product from China, then you do not own the source code. How will you comply then? A complete redesign requirement is necessary for such players."

For instance, Sparsh CCTV on April 21 announced that it has acquired the STQC certification for all its CCTV products. The certifications accessed by Moneycontrol show that they are using chipsets of US-based Ambarella. However, Sanjeev Sehgal, Managing Director of Sparsh CCTV, told Moneyontrol that they overhauled their systems in 2018 to comply with an order from the Indian Railways.

“In 2018, Indian Railways came up with a proposal of installing 8,000 CCTV cameras. However, for that we had to comply with the IoT System Certification Scheme (another STQC certification system which mandated the requirement of ensuring proper cyber security practices and trusted supply chains),” he said adding that now the company owns its complete source code and has complied with other key parameters.

Domestic contract manufacturer VVDN Technologies has also been helping its customers in complying with the STQC guidelines.

“We have helped get STQC done for some products for our customers and we are in the final stages of STQC certification for many of our customers and partners,” Sreejith C, Senior Vice President, Vision & Automotive - VVDN Technologies, told Moneycontrol.

Experts believe that the move will have a significant impact on the supply chain, particularly due to high demand. However, many also believe it to be an opportunity for Indian manufacturers to take a lead in a segment which foreign products have historically dominated.

“While STQC is crucial and beneficial for data security, it may have an impact on entry level retail / consumer cameras as such low cost cameras may not be able to comply to STQC requirements and will require changes to the hardware and firmware,” VVDN Technologies’ Sreejith added.

“As a result, many major players may need to initiate new product development using appropriate chipsets and platforms that can comply with STQC, with firmware being developed domestically in India. This shift could open the door for new entrants into what has traditionally been a highly competitive market,” he added.

Counterpoint Research Director Tarun Pathak said the impact on the supply chain will be significant, as over 80 percent of surveillance models currently sold in India rely entirely on Chinese components and cloud infrastructure.

“This shift opens opportunities for alternative chipset providers, particularly Realtek and Novatek, who are well-positioned to serve the entry-level segment with non-PRC (People's Republic of China) solutions,” he added.

The certification was mandated to ensure a trusted supply chain and robust cybersecurity for CCTV cameras. The initial compliance deadline for this was October 2024 and was last extended to April 9, 2025. The compliance with the STQC certification is not just necessary for taking part in government tenders but also for general market sales.

While countries like the United States outright banned Chinese surveillance products, India took a slightly different approach by mandating trusted supply chains of such products. It was primarily seen as an indirect way to regulate Chinese products in the ecosystem.

In the April 2024 notification, Meity mandated "employing encryption of data transmission" and undertaking penetration testing to assess resistance to cyberattacks.

"Vendors shall provide the documentation regarding the security measures implemented in the device to prevent tampering of the data being sent through wireless mode(s) of communication," the notification said. A month before that, it directed departments to avoid using CCTV suppliers with a history of prior data breaches.