India is appointing auditors to check that all telecoms equipment imported from China is free of software designed to monitor data transmissions.
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The move comes after Indian authorities threatened to bar Chinese businesses from selling equipment in India because of fears of spyware, according to US reports.
India is appointing international security firms from Canada, the US and Israel to act as security auditors of equipment imported to roll out the country's 3G mobile network.
India has just completed a 3G licence auction, which raised $14.61bn - nearly twice the sum predicted before the auction.
India's Department of Telecommunications (DoT) has also appointed BT to consult on telecommunications equipment safety while a dedicated test lab and certification centre is set up at the Indian Institute of Science (IISc) in Bangalore.
Within two years, the test lab at the IISc will take over the role of detecting the potential security threat of spyware in telecoms equipment imported from China.
In 2009, Chinese telecoms equipment maker Huawei complained that India was withholding contracts to the company over unfounded security concerns.
India's state-owned BSNL reportedly dropped Huawei from a shortlist of suppliers in the regions closest to Pakistan because of an Indian Intelligence Bureau report that said Huawei could not be trusted with the telecom expansion in the sensitive region.
According to industry analysts, India accounted for almost 11% of Huawei's $18.3bn global revenues for 2008.