The growing presence of Chinese telecom companies in Maldives and Nepal has put security agencies on alert over fears their equipment used for infrastructure development there might be bugged and misused for intercepting any communication between India and the two countries.

The concerns by the Central Security agencies which have been conveyed to the Telecom Department here came against the backdrop of about USD 5.70 crore loan given by China to Maldives to implement its Information Technology (IT) infrastructure project, according to official sources.

The Huawei Technologies (Lanka) Co. Ltd, China enterprise business group and the National Centre for Information technologies, Maldives have already signed an MoU to develop the IT Infrastructure in Maldives under the 'Smart Maldives Project', they said.

They said the proposed project assumes significance due to the fact that China can possibly exercise its influence over Maldives to utilise latter's IT network once the project is implemented.

The security agencies have also raised some concerns over the agreement the Chinese companies Huwawei and ZTE have entered with Nepal Telecom for installing next generation network in Nepal.

In a note, the Research and Analysis Wing (RAW) has alerted that "bugged equipment to monitor/intercept any communication carried between India-Nepal and India-Maldives, through these cooperation, cannot be ruled out", the sources said.

The Telecom Department has asked External Affairs Ministry to look into the issue and raise the matter at appropriate levels, the sources said.