Huawei is planning to set up a manufacturing facility near Chennai in Tamil Nadu at an investment of $300-500 million (approx Rs 1,340-2,230 crore).

The move comes in the wake of company's desire to steer clear of all the security issues by setting up of a manufacturing base in India. The company has already identified land for the proposed unit near Chennai.

The Union Government has blocked dozens of deals between India based mobile phone operators and China based equipment firms because of security fears. Though the government has been insisting that there was no blanket ban on the import of telecom equipment and networks from China based firms Huawei and ZTE, there have been no deals approved by the government since 18 February 2010. It had issued a directive that all telecom operators will have to get equipment tested before placing any orders.