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Chinese App Ban: The path ahead for Indian Economy

Ranabir Bhattacharyya


The Narendra Modi government has very recently banned 59 Chinese apps which were mostly used across all platforms, used by millions of Indian users over the years. This ‘bold’ and ‘revolutionary’ move has been taken by the Indian Government to ensure the safety and sovereignty of Indian cyberspace. Incidentally, in the lockdown phase, China has faced attack from all quarters for its alleged role in spreading the coronavirus. Very recently, China has provoked an unprecedented scenario in the Line of Action (LAC) in Ladakh to divert the attention of fellow countrymen who have been terrified by gross mishandling of the COVID-19 crisis by the Xi Jinping government in China. There is no denying the fact that this is a huge setback for the Chinese companies as the Indian domestic market is as big as the Chinese market. Suddenly, there is a considerable vacuum in the Indian tech-space. What is the way forward for the Indian tech companies and their possibilities in the Indian domestic market?

The app ban has nothing to do with the entertainment or performance quotient of TikTok, WeChat, Helo and others. The data security breach of these companies has been of major concern to not only India but also other countries. No doubt, this is a huge setback to Chinese tech giants like Alibaba, Bytedance, Xiaomi and others, but also global precedence which other countries can also follow. Time and again, there have been massive complaints on these Chinese companies who have been spying on Indians through these apps. This is absolutely against the basic ethics of modern technology. For the time being, many Indian users of these apps are feeling helpless. But this isn’t the end of the world.

This is a big opportunity for Indian companies to showcase the talent in coming up with apps similar to the banned apps, but begin a tech revolution to fight the Chinese companies in the global tech space. But there are some concerns for the Indian start-up industries as well, who are considered to be the flag bearers of India’s technology boom. After all, Chinese investments in Indian start-ups have grown 12 times to USD 4.6 bn last year. Not only that, but 17 out of 24 unicorns in India are also backed by corporates and investment firms from China. It is still not clear whether the decision to ban Chinese apps is a temporary measure or a permanent one. Otherwise, the future of these unicorns is bleak and the start-ups may face tricky scenarios soon. The Indian unicorns and soonicorns may have to face serious funding hurdles after this Chinese app ban.

The Chinese app ban can’t be considered to be India’s direct response to escalating tensions between India and Chinese. This decision to ban Chinese has more to do with data theft and less to military action across the LAC. If there was an alleged data theft, has the government acted late? Often it is too easy to criticise the government but the COVID-19 crisis and Chinese involvement in it has eased the path to take such a major decision. This is also a wake-up call for Indian companies to become ‘atmanirbhar’ and not to rely on Chinese investments. Presently, in the smartphone domain, Indians don’t have too many choices if China-made smartphones are to be avoided. But this itself is a huge motivation to the Indian engineers, scientists and the analysts. Let’s not forget that the Narendra Modi government has tightened conditions on Chinese investments in the FDI window. Apart from Chinese apps, the Modi government must be vigilant of the surveillance market where China’s Hikvision has created a monopoly. Many Chinese companies are trying to tweak their identities with collaborations with local companies to get included in the ‘Make in India’ bandwagon. The Indian PM Narendra Modi has to do more than banning the Chinese apps. But this is indeed the dawn of a new era without the Chinese and the government deserves all the praise. After all, ‘handsome is that handsome does’.

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