Chinese telecom major Huawei's proposed agreement with Indian Institute of Sciences, Bangalore, for setting up a licencing unit for authenticating equipment supplies to the country requires the mandatory nod of the Union Home Ministry on security ground.

Huawei and another Chinese firm ZTE are under the scanner of India's security agencies which fear the two firms could use the telecom equipment they supply to snoop on India and even launch cyber attacks.

Home Ministry officials said it has not received any communication either from IIS or Huawei, a major supplier to Indian mobile phone firms, seeking permission for any business deal.

"Security clearance is a must for any deal involving Chinese companies. If any proposal comes, we will examine its pros and cons and take a view," a MHA official said.

This comes in the wake of reports that Huawei has been enlisted to provide the knowhow and equipment for a facility that will be a clearing house for all imported telecom gear.

The reports said Huawei and IIS, where the laboratory would be hosted, will soon sign a pact under which the Chinese company will provide "documentation, expertise, methods and standards for studying telecom equipment".

Various central government agencies have been pointing to penetration of Chiense firms in telecom sector. However, all the concerns of the security agencies have been side-stepped by the Department of Telecom and Huawei and ZTE were allowed to operate in India, officials said.