India's latest ban on Chinese apps casts shadow over mainland tech firms' global ambitions

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reported on Monday

India’s latest move to ban more Chinese apps points to worsening prospects for tech companies from China operating in the South Asian nation, analysts said.

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The Indian Ministry of Electronics and Information Technology has placed 54 Chinese-linked apps on its ban list citing security concerns, The Economic Times reported on Monday, including those owned by Chinese tech giants Tencent Holdings, NetEase, and South China Morning Post owner Alibaba Group Holding. They add to more than 200 Chinese apps that have been barred from use in India over the past two years.

While the apps banned this time include few that are as famous as Tencent’s super app WeChat and ByteDance’s short-video sharing platform TikTok – both of which have already been blocked – India’s action indicates a “more fundamental fragmentation of the digital landscape” that has been under way for years, said Alex Capri, a research fellow at Hinrich Foundation.

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India, a growing economy, is seen by many Chinese tech companies as fertile ground to grow their businesses by replicating experiences at home. But while China’s Xiaomi, Vivo, Oppo and Realme have become dominant players in India’s smartphone market, many Chinese apps that were once popular in the South Asian country have been banned from use.

The geopolitical tensions and “value differences” between China and India have contributed to New Delhi’s persistent scrutiny of Chinese apps, according to Capri.

Global Tech News Daily

Some of the latest banned apps are owned by small Chinese tech firms. Conquer Online II, a multiplayer online game, was created by Fujian-based NetDragon Websoft, while Viva Video Editor, a video editing app, is developed by Hangzhou-based QuVideo. Neither company responded to a request for comment on Tuesday.

One of the banned apps, the mobile game Garena Free Fire, is developed by a Singapore-based company founded by a Chinese entrepreneur, who later became a citizen of the city state. The game took off in India after Tencent’s PUBG Mobile, a similar game, was banned in September 2020. Tencent currently holds an 18.7 per cent stake in Garena’s parent company Sea Limited, Southeast Asia’s most valuable technology company.

The latest ban is the second largest since June 2020, when the Indian government put TikTok, WeChat, Alibaba-backed microblogging platform Weibo, online fashion shopping app Shein, and 55 other Chinese apps on its blacklist, accusing them of being “prejudicial to [the] sovereignty and integrity of India, defence of India, security of state and public order”.

The largest ban came in September 2020, when New Delhi blocked 118 apps, including Alibaba’s online marketplace Taobao. Two months later, the e-commerce giant’s cross-border marketplace AliExpess was also added to the list.

While Chinese apps have faced scrutiny in other countries, including the United States, few have gone as far as India in keeping Chinese apps inaccessible from consumers. The market share of Chinese apps in India plummeted to 29 per cent in 2020 from 38 per cent the year before, according to a report by analytics firm AppsFlyer in 2021.

Chinese tech companies are expected to face stronger headwinds, according to Capri. “It’s going to be increasingly difficult for them to distance themselves from the Chinese state,” he said.

As tensions escalate, Chinese netizens on Tuesday voiced their anger over the Indian ban on the heavily-censored Weibo platform, which once hosted an official account of Indian Prime Minister Narendra Modi that was closed in July 2020 after a border skirmish between India and China.

“The Indians are sending themselves back to primitive society,” commented a Weibo user under a post about the news. “Why doesn’t China just hit back with the same ban?” another user wrote.

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