Ban on Applications of Chinese origin: To what end?

I've been closely tracking and reading up more and more about the notifications issued by the Government of India yesterday evening, banning 59 apps of Chinese Origin. I feel a lot of the information we are getting is cluttered, non-explanatory and somewhat lacking in terms of informing the reader about aspects beyond the headlines.

Here's my attempt at fixing the same, all in 8 short bullet pointers.

The What:

• What happened: 59 applications have been banned in India. All concerned institutions involved in the distribution of the same, the companies behind these apps, telecom networks which facilitate downloads, Internet Service Providers, app platforms like Google Play/Apple's App store which host these apps etc have been informed of the same and the notification went into immediate effect.

• What is the sheer scale of impact in terms of affected number of users? The following visual is pretty self-explanatory. If we leave aside the three services owned by this one American corporation (the FACEBOOK Group, yes, they recently re-registered themselves in all caps) and Hotstar, the top ten most downloaded apps in world's largest open/free market are essentially all of Chinese origin.

TikTok alone has (had?) around 300 million total downloads in India, it's biggest market by a wide margin, with around 120 million of them being active users.

Source: Matt Sheehan/Twitter.

• What about all these apps like Zomato/Paytm/Ola/BigBasket etc which have Chinese funding: There's a reason why all this while I've kept emphasising on apps of Chinese origin since there are many popular apps in which a large/majority stake is owned by Chinese investors. Over the last five years or so, Chinese investors have pumped in more than USD 4 billion into Indian startups. In fact, as per a rather comprehensive Gateway House report, 18 out of 30 Indian unicorns have some element of Chinese funding involved.

But there's a crucial difference: Irrespective of origin of funders, if an application has owners/founders who are Indian, or/and it is registered as a legal entity in India, it has to mandatorily abide by the laws made by the Indian Parliament and is accountable to Indian authorities. For example, HDFC Bank, India's more valuable bank by a huge margin, is majority foreign-owned, but it is fully accountable to abide by all regulations as put out by the RBI, has its offices here, employees here etc. For a lot of the just-banned apps, a sizeable chunk barely had any presence here, some had just a few contract employees that's it and most importantly, apps of Chinese origin are all bound by China's National Intelligence Law, 2017, as per which they've to give up a user's data to the Chinese Communist Party whenever asked for.

The Why:

• Why now? My belief remains that much of this has to do, of course, with the ongoing border clashes in eastern Ladakh and increasingly multiple theatres of the India-China border, in fact, particularly the killing of soldiers and an ever hardening stance militarily.

But an equally important motivation could be that some of these apps indeed were engaging in what they've been accused of and that this has been building up over time. A very recent report in Forbes revealed how TikTok was engaging in espionage. Such reports have only become more frequent of late with varying degrees of substantiating. We've earlier come across multiple reports of how soldiers and others serving in various branches of the military were instructed to delete a set of apps of Chinese origin a few months back.

Why just these particular apps though? To be honest, this is a query I've personally been grappling with. Apps like TikTok, Shein, Shareit etc are obvious candidates for such an action, given these recent reports, the sheer user base and hence associated data gathering. But many others, take Baidu Translate and Maps etc, these apps barely have any users and presence in India, to begin with. I feel some of this is posturing, like Baidu, Tencent and Alibaba are China's national champions and global giants, some of this is just subliminal messaging, without causing a lot of actual damage given their minimal presence anyways.

What Next:

• What next for these applications? The current ban, as per the notification, is interim. The developing companies behind these apps will be shortly given a chance to respond to the government's concerns before a committee that includes various ministries and make a presentation on aspects like privacy, data handling etc. The committee will then take a call on whether to remove the ban or continue with it. In fact, TikTok India head Nikhil Gandhi has said - "We have been invited to meet with concerned government stakeholders for an opportunity to respond and submit clarifications."

Till then, these apps will continue to remain inaccessible, unavailable for download/usage in India.

• What next for the users of these apps? The apps cannot be used in India anymore, of course. Some may still access them, using tools like VPNs, but that'd just be a relatively small chunk at max. One significant aspect of some of these apps, especially ones like TikTok is that they had become a full-fledged source of livelihood for some people, especially in tier 2 and tier 3 towns. The effect on them will be significant.

The ban will also affect those employees working in the offices of some of these apps and their parent companies, for example, Bytedance India has a substantial presence in India with their India headquarters in Gurgaon. While a lot of the employees in these offices serve roles with global use cases, a sizeable chunk indeed supports local operations and hence is likely to be laid off if the ban continues.

• What next for the broader ecosystem? Platforms like Instagram, youtube, Adobe scan etc might be immediate gainers from this decision, at least in the short run. But, more significantly, we cannot completely overlook the aspect of similar domestic apps/platforms being built, used and gaining base. Already, the story of Sharechat Vs TikTok's HELO has already made a lot of waves, as a story of an Indian upstart battling it out against a Chinese behemoth over the months. This phenomenon will get a boost, with twitter flooded with suggestions of (mostly) Indian alternatives to the just banned apps already, so eventually, some of the affected users might shift base to these platforms although much of this remains to be played out.

Even a cursory glance at the twitter feeds of Roposo, Sharechat and other similar Indian social media apps would reveal the extent of the benefits being accrued, with most such platforms announcing migration of former TikTok stars to their apps, reporting a huge surge in downloads etc.

That's it, do let me know your thoughts in the comments below and do share if you found this to be worthy of your time!