INTERNATIONAL/ ECONOMY/ SECURITY / GOVERNANCE
Topic: General Studies 2,3:
- India and its neighbourhood relations
- Government policies and interventions for development in various sectors
- Indian Economy and issues relating to planning, mobilization, of resources
On China apps ban: Control, not delete
Context: Indian government on 29 June 2020 announced it would block 59 widely used apps, most linked to Chinese companies.
What sort of apps were banned?
- The list includes the popular video-sharing social networking app TikTok, a mobile browser called UC Browser, and a file-sharing app called SHAREit.
- All these three has their wide user base in India, with each claiming more than 100 million monthly active users, and their origins in China.
- Given that India’s digital economy is tracked globally, blocking access does impact the valuations of such companies.
What was the explanation given by government when banning these apps?
- The apps, according to the Ministry of Electronics and Information Technology, had been reported for “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India”, which “impinges upon the sovereignty and integrity of India”
- The ministry stated that there was “information available” that they are engaged in activities prejudicial to sovereignty and integrity of India, defence of India, security of state and public order”
- From the perspective of data security and privacy, there was indeed a strong case to strictly regulate apps that handle vast amounts of user data.
What is the real intention/signal of India’s move?
- The decision comes amid continuing tensions between India and China, after the killing of 20 Indian soldiers on the Line of Actual Control
- It is the first clear message from New Delhi that it will review the rules of engagement.
- This is an interim order and firms have been given 48 hours to respond to questions on their compliance with data security and privacy but this marks a decisive break from the past.
- It serves as a statement of intent while sending a clear signal to China that there will be costs for acts of aggression.
- The fact that it has chosen to block the apps outright, rather than ensure they were complying with the law, suggests the ban is less motivated by privacy concerns than about sending a message to China
Critical Analysis of the ban
- If sending a message about China is the motivation, the ban is more signalling than substance. It may help the government show the public it is taking China on.
- However, deterring Chinese behaviour on the border requires a tough diplomatic , economic and military response.
- The ban on Chinese mobile apps may be construed as low hanging fruit and a relatively soft target, but it is, at the same time, a decision that makes the point without leading to a revenue loss for India or hurting it economically
- Nevertheless, tensions on the border, as well as the COVID-19 pandemic, have ignited a much-needed debate on India’s economic dependencies on China.
India needs to reduce economic dependence on China
- There is an asymmetry in power, a visible economic disparity. The Chinese economy is roughly five times larger than India’s.
- While India accounts for only 3 per cent of China’s exports, China (excluding Hong Kong) accounts for 14 per cent of India’s imports, and 5 per cent of exports
- India remains reliant on Chinese products in several critical and strategically sensitive sectors, from semiconductors and active pharmaceutical ingredients to the telecom sector.
- Chinese vendors are involved not only in India’s 4G network but in on-going 5G trials as well.
What other retaliatory steps are being considered?
- Earlier, in a move that was apparently aimed at Chinese firms, the government had made it mandatory for FDI from neighbouring countries to take prior approval so as to curb opportunistic/hostile takeovers during this period.
- E-commerce firms have been asked to explore the idea of listing the product’s country of origin amidst call for boycott of Chinese products
- There is also talk of raising tariffs on Chinese goods
- Government can also impose curbs on contracts (having Chinese connection) in some infrastructure projects.
- However, given how pervasive Made in China is, how vast there is Chinese presence in the India’s technology space— its investments in a long list of Indian unicorns — each step will come with its own set of consequences.
- New Delhi should prepare for these and calibrate its response, step by careful step.
Connecting the dots:
- Justice BN Srikrishna committee’s report on the data protection law
- Twitter Vs Trump: debate on regulating Social Media