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Mobile Application Ban – Is this The Start of a Trade War Between India & China

by Tavaga Invest

By: Tavaga Research

The Ministry of Information Technology has decided to block 47 more (most of which were clones of previous 59 banned applications) mobile applications in India after banning 59 Chinese applications last month. The list includes many popular Chinese Applications like TikTok and WeChat. The move follows after the recent border dispute between India and China. 

More importantly, another 275 Chinese applications are on the radar including PubG.

What Are The Reasons To Ban These Applications?

According to the press release, the Government of India (GoI) has expressed concerns over data privacy of 130 crore Indians. Servers of these applications are located outside India, sometimes in hostile countries, and this has warranted such actions.

Are All Chinese Applications Banned?

No. GoI has picked up the applications which had data security issues and were providing risks to consumer privacy. A list of banned applications is covered here.

1APUS Browser31QQ International
2Baidu map32QQ Launcher
3Baidu Translate33QQ Mail
4Beauty Plus34QQ Music
5Bigo Live35QQ Newsfeed
6Cache Cleaner DU App studio36QQ Player
7Cam Scanner37QQ Security Center
8Clash of Kings38ROMWE
9Clean Master – Cheetah Mobile39SelfieCity
10Club Factory40Shareit
11CM Browser41Shein
12DU battery saver42Sweet Selfie
13DU Browser43TikTok
14DU Cleaner44U Video
15DU Privacy45UC Browser
16DU Recorder46UC News
17ES File Explorer47V fly Status Video
18Hago Play With New Friends48Vault- Hide
19Helo49Vigo Video
20Kwai50Virus Cleaner
21Likee51Viva Video – QU Video Inc
22Mail Master52Vmate
23Meitu53We Meet
24Mi Community54WeChat
25Mi Video Call – Xiaomi55Weibo
26Mobile Legends56WeSync
27New Video Status57Wonder Camera
29Parallel Space59YouCam makeup
30Photo Wonder

Source: Government of India | List of 47 applications which were recently banned is still not available

What Would This Mean For The End Consumer?

The GoI has disallowed these applications both on mobile and non-mobile Internet-enabled devices. These applications would no longer be available on Google Play Store and iOS Store for Indian consumers. 

The Impact Of This Ban – Is This The Start Of A Trade War Between India & China?

With border tensions escalating between India and China, there have been talks of completely boycotting Chinese goods. This, however, would be easier said than done, on account of the two economies being extremely interdependent. China is India’s second-biggest trading partner, coming only after the USA. It aids the Indian economy heavily, from supplying raw materials and industrial components including auto components, telecom equipment, pharmaceutical ingredients, smartphones, chemicals, and iron and steel products, to financing and investing in growing Indian startups.

In FY 19-20, China accounted for more than 5% of India’s exports and over 14% of its imports, becoming India’s biggest exporter. Even though we saw a dip in the absolute value of the goods imported from China, their overall share in India’s total imports rose from 13.68% in the previous fiscal year to 14%, hence widening the trade deficit further.

 Now, the obvious choice by speculators of products that would be banned would be mobile phones, where Chinese brands own the most of the market share. However, at this point of time, we see little concerns of the issue getting spilled over to other Chinese goods as;

  1. Data Privacy Issues Well Flagged – GoI had not kept data privacy concerns a secret. Many Technology behemoth, like WhatsApp and Amazon, have been forced to set up their servers in India in the recent past. Data localization is and will be a theme for global technology companies operating in India.While some Chinese mobile applications are covered in the list, it is worth noting that the list is not exhaustive and several other Chinese origin applications, with local servers and following the lie of the land, would continue to operate in India.  
  2. The List Is Endless – While some of the brands are Chinese, everything from the manufacturing to sales is taking place in India. In addition, several home growth start-up companies have majority Chinese, but their predominant market remains India and they continue to employ most Indians in the workforce. Considering such developments, it’s very difficult to draw a line between Chinese goods and Indian goods.
  3. India China Trade Partnership – India imports $65.1 bn from China, while exporting $16.6 bn to China. The raw material for key industries is sourced from China and an overnight reduction in dependence is not feasible. As from the Chinese perspective, dependency on Indian imports is very low and any counteraction would have limited impact, in our opinion.     

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