According to the experts, few Singapore and Hong Kong-based apps were also banned amongst 59 apps due to the Chinese parent companies
or favourable Chinese interest. For instance, live streaming platform Bigo Live, one of the banned apps is owned and controlled by a Singapore-based company Bigo Technology, is ultimately controlled by the Chinese entities, said Sumit Kochar, corporate commercial lawyer and transaction advisory partner at Dolce Vita Trustees.
“Now, Chinese entities are resorting to launching apps by incorporating companies
in India’s favourable jurisdiction to avoid any potential scrutiny from the Indian Government,” said Kochar. He said these entities are resorting to means of creating corporate structures in various jurisdictions in a manner that is arduous to trace the ultimate beneficial owner of such companies
sitting in China.
India’s anticipated 850 million smartphone users by 2025, is attractive for any app developer. The future potential earnings are the lure. This means getting in early into the market is essential. If one is late to tap the market, the cost of entry and acquiring consumers becomes higher. Experts said it's not about earnings today but potential earnings when India reaches a $5 trillion dollar economy.
Over the last five years, China has quietly created a significant place for itself in India in the technology domain. China has entered the Indian market through venture investments in start-ups and penetrated the online ecosystem with its popular smartphones and their applications (apps), according to foreign policy think-tank Gateway House.
TikTok, the banned video app, had 200 million subscribers and had overtaken YouTube in India. Alibaba, Tencent and ByteDance
rival the US penetration of Facebook, Amazon and Google in India. Chinese smartphones like Oppo and Xiaomi lead the Indian market with an estimated 72 per cent share, leaving Samsung and Apple
behind, according to Gateway House.
Chinese app Club Factory which was also banned claimed to be the third-largest e-commerce platform in India. The other banned platforms include ‘Mi Video Call and Mi Community’ of Xiaomi, which is the top smartphone vendor in the country.
India on Monday banned 59 Chinese mobile apps as a security measure after the India-China face-off in the Galwan Valley in Ladakh. The government invoked its powers under Section 69A of the Information Technology Act and relevant provisions under IT Rules 2009 to block these apps, the Ministry of Electronics and Information Technology (MeitY) said.
“Border hostilities potentially give India room to invoke the national security clause in the WTO (World Trade Organization) rules,” Blaise Fernandes, director at Gateway House had said. “Legally the government is well within its rights to impose section 69A, plus there are WTO rules that also empower a country.”
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