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China tech

India's ban on Chinese apps: how TikTok and others are affected

Five things to know about government clampdown that cites national security concerns

India's recent confrontations with China have ranged from bloody frontier clashes to calls for a boycott on Chinese imports. Now the tension has spread to cyberspace and the tech world.

Citing national security concerns, policymakers in New Delhi have shut down dozens of popular apps offering a wide range of services, from e-commerce to social media and instant messaging. All have one thing in common: they come from China.

Here are five things you should know about the latest episode in the China-India conflict.

What has India done?

The Indian government said Monday that it has decided to ban 59 mobile apps on national security grounds. It said the information technology ministry "has received many complaints from various sources, including several reports about misuse of some mobile apps available on Android and iOS platforms, for stealing and surreptitiously transmitting users' data in an unauthorized manner to servers which have locations outside India."

Prohibiting the apps "will safeguard the interests of . . . Indian mobile and internet users," the statement said, adding, "This decision is a targeted move to ensure the safety and sovereignty of Indian cyberspace."

Although the Indian government did not unveil any evidence against the Chinese apps, policymakers worldwide have long been concerned about the possibility of user data being transferred to China. Some also claim that the rising popularity of Chinese apps among government employees and military personnel could pose a threat to cybersecurity, as telecoms and technology companies in China are legally required to cooperate with Beijing in national security cases.

It remains unclear how the ban will be implemented. But at least one app -- TikTok -- is no longer available for download in India, according to local users. Existing users can still access the app for now. 

Why is India acting now?

The decision comes on the heels of the first deadly military clash between India and China in 45 years. Earlier in June, a military standoff between the two nuclear-armed nations over a disputed stretch of the border in the western Himalayas turned violent, with some 20 Indian soldiers killed. China did not disclose its casualties.

The tension has also spilled over to the commercial world. The Indian government has reportedly begun reviewing economic ties with China and called on state-owned telecoms not to use equipment from Huawei Technologies and other Chinese suppliers.

Meanwhile, the hashtag #BoycottChineseProducts has gained traction on social media. Remove China Apps -- an app that enabled users to detect the origin of any app on their phones and delete them if desired -- was downloaded at least 1 million times within 10 days of its debut, until the app itself was removed by Google for violating its rules.

The two big Asian powers are competing on the economic front and in high technology. In a May speech, Prime Minister Narendra Modi called on Indians to build a more "self-reliant" nation to put growth back on track.

Which companies will be affected?

Almost all of the internet giants in China will lose business in India, including ByteDance, owner of the TikTok short video app; messaging app WeChat's owner Tencent Holdings; UC Browser developer Alibaba Group Holding; Baidu map service provider Baidu; and Nasdaq-listed Sina, which runs the Twitter-style social media platform Weibo.

Chinese hardware companies have also felt the heat. For instance, Beijing-based smartphone vendor Xiaomi's Mi Video Call app has been included on the list of banned apps.

The move is also expected to send a chill through Chinese venture capital firms, many of which have become increasingly active in India in recent years. Club Factory, an upstart ecommerce site that has been banned by the Indian government, counts Qiming Venture Partners as its backer.

How much of an impact will the move have for Chinese companies?

As the domestic market remains the bread and butter of most Chinese companies, the regulatory headwinds in India are unlikely to hurt their financial performance much. However, the ban has cast a shadow over their global ambitions.

India has long been viewed as a stepping stone for Chinese companies eyeing a big slice of the global market. Many believe the similarities between India and China -- the only two countries with more than 1.3 billion people, a vast land mass and rapidly changing societies -- give Chinese companies the upper hand in their battle with global rivals in India.

TikTok, for example, is hugely popular, with 323 million downloads in India in 2019, according to market intelligence company Sensor Tower. That made India the largest market for the Chinese short video app last year, accounting for almost half of all downloads.

With its most successful product under pressure in its most important overseas market, the road to a ByteDance initial public offering -- which is widely expected, though the company has not revealed firm plans -- may also be clouded. Its investors include Japan's SoftBank Group.

Alibaba's UC Browser, for its part, also had roughly 12.6% of India's browser market in May, according to industry information portal Statcounter. While it still lags behind Google's Chrome, which holds 75%, it is way ahead of Apple's Safari and Firefox, which control 3.2% and 2.15%, respectively.

What is the next step likely to be?

This is not the first time Chinese apps have been blocked in India. Last April, TikTok was also temporarily shut down after a state court ruled that it was spreading pornography. It is unclear how long the current restrictions will last.

TikTok has already responded. Nikhil Gandhi, head of TikTok India, said in a statement on Tuesday via Twitter that his team is in the process of complying with the new rule and that TikTok will meet government officials to respond and submit clarifications.

"TikTok continues to comply with all data privacy and security requirements under Indian law and has not shared any information of our users in India with any foreign government, including the Chinese government," the statement reads. "Further if we are requested to in the future, we would not do so. We place the highest importance on user privacy and integrity."

Tencent, Alibaba and Baidu had no immediate comment on the decision.

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