MUMBAI – India’s decision to ban 59 Chinese apps could hurt the companies developing them while giving domestic and Western developers access to the country’s lucrative and growing youth market.
India, home to a youth population that is larger than China’s, alleged on Tuesday that the apps “are engaged in activities which is prejudicial to the sovereignty and integrity of India, the defense of India, the security of the state and public order.”
Analysts identified Chinese apps which could be replaced. Documents on CamScanner could be shifted to Google Drive. Dubsmash, Chingari and Bolo Indya could be replacements for TikTok.
One analyst said the ban could also open up new possibilities for Facebook, which is witnessing an exodus of advertising by companies unhappy with its handling of hate speech.
TikTok is part of ByteDance, which is owned by Chinese billionaire Zhang Yiming. He has a net worth of US$16.2 billion, according to Forbes magazine, which ranked him No 61 among the world’s richest.
Founded by Yiming in 2012, ByteDance is a Beijing-based multinational internet technology company reportedly with a net worth of $100 billion.
Other Chinese apps that are affected include Shareit, Kwai, UC Browser, Baidu map, Shein, Clash of Kings, DU battery saver, Helo, WeChat, UC News, WeSync, Vigo Video, New Video Status and DU Recorder.
India’s action is seen as retaliation for China’s incursions into its territory in the northernmost tip in Ladakh. The Indian government didn’t specifically say the move was in response to the Chinese action in which at least 20 Indian soldiers were killed and People’s Liberation Army (PLA) forces encroached on strategic territory.
Many Indians have been clamoring for retaliation against China, which is also among India’s top trading partners. India has a $53 billion trade deficit with China as the world’s second-largest economy sells many items, including critical inputs for the automobile and pharmaceuticals industry.
The latest Indian action is seen as a gentle yet an effective nudge to send a message to its northern neighbor. It also opens up space for local developers to push ahead with their apps in a growing market of about 350 million young people.
“Over the last few years, India has emerged as a leading innovator when it comes to technological advancements and a primary market in the digital space,” the Indian government said.
“At the same time, there have been raging concerns on aspects relating to data security and safeguarding the privacy of 1.3 billion Indians.”
With the growing use of smartphones, India is one of the world’s biggest ready-made markets for the aspirational youth population. India has more than 500 million smartphone users and the number is growing.
Sensor Tower, which monitors data on mobile apps, says India is an important market.
“India has been the biggest driver of TikTok installs, generating 611 million lifetime downloads to date, or 30.3% of the total” Sensor Tower says on its website.
“China is the No. 2 country for installs, accumulating 196.6 million to date, or 9.7% of all downloads, for its version of the app, known as Douyin. This figure does not include third-party Android store installs in the country. The United States is the third for downloads with 165 million installs, or 8.2%.”
The government’s action against TikTok was not the first time it had acted against the app. The video-sharing platform was blocked for a few days in April 2019 by Madras High Court for allegedly spreading pornography. The ban was upturned by the same court a few days later.
Tuesday’s government ban was welcomed by some Indian industrialists, including Kiran Mazumdar Shaw, an outspoken executive chairperson of Bangalore-based biopharmaceutical company Biocon.
“The Government has actually provided a huge opportunity to tech startups to leverage the App ban and create new and innovative Apps,” Shaw posted on Twitter. “If they miss this opportunity they have themselves to blame. This can revive tech jobs in a big way.”
China, on the other hand, expressed strong concern over the bans.
“India’s measure selectively and discriminatorily aims at certain Chinese apps on ambiguous and far-fetched grounds, runs against fair and transparent procedure requirements, abuses national security exceptions and is suspected of violating the WTO rules,’’ said Ji Rong, spokesperson of the Chinese Embassy in India.
“It also goes against the general trend of international trade and E-commerce, and is not conducive to consumer interests and the market competition in India.”
Global Times cited foreign ministry spokesman Zhao Lijian as saying, “China expressed strong concern over the bans and is checking to verify the situation.
“India has a responsibility to safeguard the interests of Chinese firms. Both China and India have benefited from their pragmatic cooperation, and undermining such cooperation goes against India’s own interest.”
Global Times also cited Sha Jun, executive partner at the India Investment Services Center of the Yingke Law Firm, as saying Indian government’s behavior was “too childish and emotional” and “marks a very bad signal for further Chinese investment in India.”
The paper said the presence of Chinese investors in India’s high-tech start-up ecosystem has given the country significant standing in recent years not only due to funds brought to the emerging market but also through the provision of cutting-edge technologies and experience to scale up businesses.
By the end of 2019, more than half of India’s 31 unicorn companies were invested in by Chinese tech giants Alibaba and Tencent, according to the Iron Pillar Fund, a fund management company in India, Global Times said.