India is due to hold trials for installing a next-generation 5G cellular network in the next few months but has not yet decided on letting Huawei take part.
According to Aljazeera, India's ambassador in Beijing, Vikram Misri, was called to the Chinese foreign ministry on July 10 to hear China's concerns about the US campaign to keep Huawei out of 5G mobile infrastructure worldwide.
During the meeting, Chinese officials said there could be "reverse sanctions" on Indian firms engaged in business in China should India block Huawei because of pressure from Washington, one of the sources said, citing a readout of the ambassador's meeting.
China's foreign ministry said Beijing hoped India would make an independent decision on 5G bidders.
"Huawei has carried out operations in India for a long time, and has made contributions to the development of Indian society and the economy that is clear to all", spokeswoman Hua Chunying said.
"On the issue of Chinese enterprises participating in the construction of India's 5G, we hope the Indian side makes an independent and objective decision, and provides a fair, just and non-discriminatory commercial environment for Chinese enterprises' investment and operations, to realise the mutual benefit."
India is unlikely to ban Huawei as its solution is still the cheapest on the market, and its relationship with the US is not that good. However, there have been movements within India to move away from dependence on Chinese gear on security grounds – particularly in the mobile market.