Chinese apps have been shown the exit door from Indian market. We will do an analysis on the potential impact of Chinese App Ban in India and around the world.
The government of India has issued a ban on 59 Chinese apps including biggest Chinese tech giants like TikTok and WeChat on 29th July. Since then the biggest tech companies in China have lost the largest market of internet users in the world. India has strictly confirmed that these apps were involved in activities that are prejudicial to the sovereignty and integrity of India, defence of India, security of state and public order. This is perhaps the boldest move India has executed in this decade against China. This act will have multilateral and multi-faced impacts in the Indian sub-continent as well as the around the globe.
Know the law behind this ban
Ministry of Electronics and Information Technology has invoked its power under Section 69A of the Information Technology Act which deals with the provisions of the Information Technology (Procedure and Safeguards for Blocking of Access of Information by Public) Rules, 2009.
Let’s discuss the potential impacts one by one
The End of Passive Diplomacy
India has clearly taken a stringent stance and refused to be a victim of China’s Nibble and Negotiate policy. This stringent step was taken during multiple face-offs in India-Chinese border, specially the move was taken after triggered tensions in Galwan valley and Tsangpo lake regions. India has been able to table the message to the world that India wants to end the passive diplomacy.
Hurting Chinese Economy
Chinese technology firm ByteDance was to establish a data centre in India to store Indian user data. Which was opposed by several lawmakers in India. It was the news that came into light, but there were several that didn’t. It was also alleged that TikTok was illegally sharing user data with the Chinese government. China’s National Intelligence Law from 2017 clearly can demand data from any Chinese company in favour of the Communist party of China. This data further can be used either for political or economical gains. India’s digital retaliation of Chinese app would be the primary and possibly the biggest blow to such illegal data collection by the Communist party of China.
A Boost for Indian Startups?
Definitely there will be a boost for Indian start-ups. But there is a catch. Indian government should be coming with a proper plan and initiative to nurture Indian start-up or else they will be occupied by other foreign investors. Promoting and encouraging Indian Entrepreneurship will not be enough. A strategic and comprehensive economic support is needed for the long term benefit of Indian economy.
Huawei and ZTE Could Be the Next
Huawei was given the green light to participate in the 5g trials in India, but now it should be reconsidered and perhaps a global ban is needed. The world is blaming China for unleashing a pandemic. The countries are looking to teach a lesson to China and Huawei is the perfect target involving many security concerns surrounding the telecom giant. Activities of another Chinese company ZTE is also under scanner. If India blocks Huawei or ZTE, it won’t be the first country to do so. Countries around the world are dumping the Chinese tech giants. Australia and New Zealand won’t allow Huawei to build a 5g networks in their country. Japan too has imposed a ban. The United Kingdom has limited Huawei’s participation in the 5g rollout.
China’s response to the ban
China feels that the ban of Chinese apps violates of the World Trade Organization (WTO) rules and it is also deny the general trend of international trade and e-commerce. Hence The Communist party of China could file a formal complaint at the WTO.
The government of India invoked the ban under Section 69A of the IT Act issuing an interim order or under emergency.The emergency route Section 69A of the IT Act allows content to be blocked on the direction of the Ministry of Electronics and Information Technology. Thus India will easily win the case if China makes a formal complaint at the WTO.
Controversy with Chinese App Ban
- The step taken by the Government of India excluded one of the most valuable payment and e-commerce startup Paytm which is backed by Chinese Alibaba group Ant Financial, as well as popular education platform Byju which counts the Chinese firm Tencent as an investor. Besides the most popular companies in India like Bigbasket, Ola, Hike Messenger, Sanpdeal, Zomato, Swiggy, Delhivery, Flipkart, Make my trip are also funded by Chinese investments, excluded in the banned list.
- If the data protection is the primary reason, then why the government has taken so long to take this decision. India is not the first to initiate such blockage. The Dutch data protection board already started investigation against TikTok. US and Australian military prohibited the usage of TikTok.
Need of The Hour
- India has to overcome the Economic Dependencies on China. India is still heavily dependent on China on several critical and strategically sectors. However, it will not be easy for India to move on. Here is a graph of India-China trade deficit.
- India Need a Stringent Data Security Architecture: Data privacy and security is been a serious issue for long time. Now-a-days a huge number of social and economic activities are being taken place online in every fragments of seconds. Thus the importance of privacy and data protection is increasingly recognized. So in the era of digital revolution a data protection law is most anticipated.