A day after the Union government banned 59 Chinese applications, including popular ones such as TikTok, Shareit, Mi Video Call, Club Factory and Cam Scanner, citing threat to national security and sovereignty, an Information Technology Ministry official said the banned platforms would be given a chance to submit their clarifications.
This is in line with provisions of the Information Technology (Procedure and Safeguards for Blocking of Access of Information by Public) Rules, 2009.
Following the ban, TikTok withdrew its app from Google Play Store and Apple App Store. In a statement on Tuesday, it said it had been invited to meet the authorities concerned and submit clarifications.
The company’s India head, Nikhil Gandhi, said it had complied with all Indian laws related to data privacy and had not shared information of any Indian user with foreign governments, including the Chinese. “The government has issued an interim order for the blocking of 59 apps, including TikTok, and we are in the process of complying with it.”
“We have been invited to meet with concerned government stakeholders for an opportunity to respond and submit clarifications,” he said.
While government sources said an order to remove all the banned apps was sent to both Google and Apple, industry sources confirmed that both companies received an order relating to removal of only TikTok as of Tuesday evening.
Helo, which along with TikTok is owned by China’s ByteDance, said it was working with the key stakeholders for an opportunity to respond and submit clarifications.
Experts have said the move to ban the apps, which together are estimated to have over 500 million monthly active users in the country, may have a significant impact on the Chinese firms.
“We need to wait and watch to understand the impact of banning these apps on the Indian economy as we are not sure about the anticipated counter from China. The economic impact on Chinese firms would, however, be significant,” Anand S., vice-president, TechVision, Frost & Sullivan, told The Hindu.
He noted that some of the apps banned were very popular in India. For instance, the time spent on Tiktok in India in December last was more than the next 11 countries combined. “The fear that the implications could be followed in other countries is a bigger threat to the Chinese economy”, he said.
Notably, In 2019, ByteDance said in a court filing that it was losing more than $500,000 a day in addition to putting over 250 jobs at risk when the app was temporarily blocked in India in April 2019.
Kazim Rizvi, founder of tech policy think-tank The Dialogue, pointed out that all these applications put together had more than 500 million monthly active users in May 2020.
“…Most of these platforms have Indian creators, for many of whom this is the only source of income. Many of these apps have offices and employees in India, and a few thousand jobs could be at stake,” he said.
Such a ban was merely a quick-fix to systemic challenges in the privacy infrastructure of India which could be remedied via legislating a data protection law, which would ensure the appointment of a data protection authority, which could routinely assess the privacy and the cyber-security measures undertaken by various apps and ensure transparency and accountability in all restrictive measures taken against the defaulting apps, he added.
Mr. Anand, however, said, “We may not see a huge decline in job opportunities for Indian employees as many such opportunities exist in the Indian ecosystem and this ban may potentially lead to a surge in capacity build-up for Indian firms.”
Interestingly, India-based applications witnessed a huge surge in downloads following the ban. Community-commerce platform Trell claimed it saw a million downloads just after the decision was announced. Likewise, immediately after the ban, video sharing platform Chingari — similar to TikTok, saw 1,00,000 downloads per hour.
Sanchit Vir Gogia, chief analyst & CEO at Greyhound Research, said the move was a leveraging technique by the government to bring people on the table to negotiate. The idea, however, should not be to block the companies but to get them to invest in the country. For instance, this move may push such apps to invest in data centres in the country, he pointed out.
“If you look at other technology giants such as Google and Microsoft, they invest in the country. They give jobs and have committed to keeping data of Indian citizens locally. The step will have an impact on these firms…The market opportunity in India is huge,” he said, adding that parallels could be drawn with what happened in the IT sector. With the visa-related issue coming up in the U.S., Indian companies started investing in the U.S. and hiring locally. Every country protected its interest.
Asked about the impact on Chinese investments in Indian start-ups, Mr. Anand said India had made a concerted effort in recent months to bring down the reliance on Chinese imports as well as investments from China. The recent border crisis had seriously aggravated this effort, in terms of limiting trade and commercial ties with China.
“The investment by Chinese-based firms in the start-up ecosystem is huge. Almost all top companies have some investment coming in from China. Until there is clear guidance from the Government of India, we might witness a likely curb in investments from Chinese companies or they may sell their stake to other companies that do not have a barrier to trade with India,” he stated.