While the PM of India motivates the country with the slogan of “vocal for local” under his mission of “Aatmanirbhar Bharat” which translates to “self-reliant India” making India “a bigger and more important part of the global economy”, the government of India through an interim order blocked access to nearly 170 Chinese mobile phone applications in two phases. Talking about international trade, China has a rich history that can be traced back to the barter system. This system was replaced by the globally relevant mercantilism since the 16th century which promotes imperialism, tariffs, and subsidies on traded goods to achieve the goal of maximizing the economy by exporting and importing goods. China as we see has excelled in the game of mercantilism as it is the world’s largest manufacturing economy and exporter of goods.

If you look around in your house, you will find most of the products being either manufactured or assembled in China or they might have been labeled as “Made in China”. According to a report, India imported goods worth $62.4 billion from China in the period April 2019- Feb 2020, which includes products like electrical machinery, cell phones, heavy machinery, telecom, power, plastic toys, among others. Talking about the IT industry, inspite of the fact that the Indian software industry enjoys innovative excellence over their Chinese counterparts, Chinese software companies are way ahead in generating revenue which was recently noted to be nearly four times that of India. China has a domestic software market and is self-sustainable and creative while on the other hand, the Indian software industry is more vulnerable thanks to the higher dependence on western corporate customers. By not getting domestic support, India’s business depends on software outsourcing which is the most basic work in the software industry and cannot generate great value.

To generate revenue, you need a product to sell and a buyer to purchase and China being the top dog in producing both products and buyers, triumphs the game. Not only, they sell their products in their country but they are also onto capturing to a very large extent the market of the world’s second most populated country-India. China makes inferior to good quality products across segments and to sell them they are planning and working to expand their businesses across the world through the Belt and Road Initiative. According to research, India contributes around 39% of the market for Chinese apps of which the most used phone applications like Tik-Tok have generated revenue of Rs 7.5 crore each day. To end this dominance of imports of goods and services from the Chinese, the “made in India” campaign was recently launched and with a digital strike government of India announced a ban on nearly 170+ apps.

Sharing a border of a wide area from the Himalayas to the North-East, the two of Asia’s biggest neighboring countries have seen a series of violent border skirmishes since the 1950s. The most recent clash between the armies of both the countries took place in May-June 2020 which resulted in the deaths of 20 Indian soldiers and casualties of possibly 43 Chinese soldiers(as per some reports). A few days after the Chinese provocations at Line of Actual Control (LAC), the government of India announced a ban on some of the most popular Chinese applications including Tik-Tok, Share IT, and WeChat. The ban was supposedly a response to the conflict at the border. It was also a direct hit in the technology sector where there were already mounting concerns about Chinese espionage and threats to national security. It was believed that these Chinese applications were sabotaging the security of the state by the unauthorized transmission of user data to the illegitimate firms and the Chinese state intelligence apparatus. Apart from India, countries such as the United Kingdom, and the United States of America had also raised security and privacy concerns with Chinese apps.

Ban of Chinese App – Was it necessary?

Trade is the biggest strength of China’s economy and to become the world’s largest and strongest economy, the Chinese president had launched the Belt and Road Initiative project in 2013 to enhance regional connectivity and embrace a brighter future. To make this project a success, China needed cooperation from the surrounding countries and most of the Asian countries have taken part in this project except India. Now, the question arises, how did other countries agree? Some experts have pointed out that China is providing loans to countries for impracticable projects and setting up a debt trap for them. Under this debt-trap diplomacy, countries such as Pakistan and Sri Lanka and some in Africa and South America have already been made victims and long-term pawns.

India has not cooperated with China for the project as India has transparency issues, security issues, and communication issues with China. Furthermore, China has expanded its infrastructure in countries around India. Some observers including those in Indian think tanks have argued that the infrastructures built by China are just the groundwork for Chinese military bases which are meant to isolate India in the so-called “string of pearls”. The idea of string of pearls was originally proposed by Booz Allen Hamilton, an American consulting firm way back in 2004. It still pervades the international discussion when there is a talk on India and China. Though the idea seems a little vague, the inherent warnings in it (string of pearls) come handy. The majority of reasons lie in an ill-defined, 3,440km (2,100-mile) long border that both countries dispute. Both the countries are competing to build infrastructure near the place known as the LAC (Line of actual control). India’s construction of a new road to a high-altitude airbase was seen as one of the main triggers for a clash with Chinese troops in June that left at least 20 Indian soldiers dead and an unknown number of casualties (some say it is 43) on China’s side. Subsequently, India responded to this with a ban on 59 mobile applications of Chinese origin followed by banning around 119 more later. Ministry of Electronics and Information Technology proclaimed that the ban was imposed under Section 69A of the Information Technology Act, 2000. The Ministry even asserted that it had received a lot of complaints from various sources about data security and hence accepted and worked on the recommendations from the Indian cyber-crime coordination center, which works under the Ministry of Home affairs.

Not only the Software market but the hardware market i.e. the smart-phone manufacturing market of India is also captured to the tune of almost 81% by Chinese smart-phones manufacturers which provide a backdoor way to Chinese manufacturers to breach data. The statistics also showed a growth in the reach of Chinese applications in the Indian market. Talking about Tik-Tok a video-making app, it had an active user database of over 200 million users in India, or almost 40% of its 500 million users worldwide. Likewise, the ShareIt app had over 400 million active users in India. Surely, banning such apps with a high number of users-base has affected the Chinese IT sector economically.

Conclusion

Data-wars are the latest version of wars in the international domain. Belligerents in the new cold war of information and data are fighting over the currency of the modern age, which is personal information. The battles are over who controls and owns the data. Now, whether the app ban has affected their revenues or not is not the principal question. The central query is how it has affected their users, subscribers, and data. Just because the apps are available for free, we must not think that nothing is being sold. Most are not aware of the fact that we are the product where we are being studied, evaluated, and are being sold in the mode of marketing and advertisements. Also, it creates for them a treasure-trove of data which gives them a long term benefit. Thus, data protection becomes difficult whilst China’s market is still growing in India through hardware and software at an appreciable pace. For Chinese companies in any sector, in the long term, India is their nearest and largest market putatively.

While some say, that the application bans have just been a waste of time because it did not only create chaos but also has affected many jobs. Secondly, it has affected the common people who were earning through apps like Tik-Tok, Helo, and Bigo. Others believe that App ban is not sufficient and that there should be a complete ban on allowing the work of Chinese firms from arriving in India through any means.

In the long-term, depriving China of this valuable market for its app and related information will inhibit its ability to exert influence and access information, possibly sensitive, inside India. What we also need to do on our end on a policy level is that we now need to be more aware and strict as to whom to allow to venture into the Indian IT domain. Some years back the external intelligence agency of India had communicated to the DoT in GOI in a note to restrict the access of the Chinese corporation Huawei in the Indian IT sector. There was also the case where DoT raised the alert when Chinese firms filed tender applications when GOI was planning to lay communication cables between the Andaman and Nicobar Islands and the mainland of India. Apart from the application ban, extra measures like restricting the entry of Chinese firms in the Indian business domain through any means would also help in safeguarding Indian interests. We need to have revised data protection laws that are stricter. Also, to grow economically, we need to find alternatives to the applications in use in India. And most importantly GOI should encourage Indian entrepreneurs, provide them with access to easy finance and allow them spaces like incubation centers where they can brainstorm on their ideas. Officials who are responsible for approving the formalities in the relevant ministries and departments need to be penalized for palm greasing. The layers of byzantine paper-works and formalities should be removed to promote business. India should, without any delay, incorporate the models of optimization of supply chains used by China where vendors for any particular factory or firm are within a 5 km radius from the firm. Entrepreneurs should also learn and grow with the opportunities coming for them. These can help in countering the Chinese muscle-flexing in Indian IT, business, and security domains.

The author is a student member of Amity Centre of Happiness.

Editor Opinion, Biswarup Mukhopadhyay has given important inputs for the article.