Why did India just ban TikTok?

Tue Jun 30 2020
Mark Cooper (3150 articles)
Why did India just ban TikTok?

India announced on Monday that it is banning ByteDance’s TikTok, Alibaba’s UC Browser, Tencent’s WeChat, and more than 50 other, mostly Chinese-owned, mobile apps.

Why? Well, the Indian Ministry of Information and Broadcasting said in a statement that the apps were “prejudicial to sovereignty and integrity of India, defense of India, security of state and public order.”

But the ban seems more likely to be about the government of Prime Minister Narendra Modi trying to show his own citizens he is taking tough action in response to a clash between Indian and Chinese soldiers earlier this month than any actual threat to national security the apps pose.

That confrontation, which took place overnight on June 15 and on the morning of June 16, was the bloodiest along the two giant nations’ shared Himalayan border in 45 years. At least 20 Indian soldiers were killed in vicious hand-to-hand combat on a ridge about 14,000 feet above sea level. China did not acknowledge the encounter or admit any casualties, although India said Chinese soldiers were likely also killed in the fighting.

The clash came weeks after India accused China of deploying troops on the Line of Actual Control, as India’s unsettled border with China is known, into an area that India considers its territory.

But Modi’s government does not want to risk a war with China: China’s military is more powerful, plus India is still grappling with a rapidly expanding COVID-19 epidemic.

India is also far more dependent on Chinese goods than China is on Indian ones. That limits how much leverage Modi has to punish China economically. So far, his government has taken some action, such as increasing inspections of goods coming into Indian ports from China and canceling a $500 million deal for a Chinese car company to build an auto plant in India. It is talking about imposing higher tariffs and more stringent quality control measures on Chinese goods too.

Of course, these measures also hurt Indian consumers and Indian companies dependent on Chinese supplies at a time when India’s economy is already reeling from the effects of COVID-19.

The bans on TikTok, WeChat, UC Browser, and others seem to be part of this nascent trade war.

Of the apps banned under the Indian government order, TikTok and UC Browser both have a significant user base in India. TikTok has 81 million active monthly users there, according to data analytics firm App Annie, making it the ByteDance-owned brand’s largest market. Alibaba has said its UC Browser has about 130 million users in India, or about a 12% share of the Indian browser market.

But ByteDance has been facing increasingly stiff competition from a similar Indian app called Chingari that pays users to create content.

And WeChat, for instance, which did well when it first launched in India in 2013, has since seen its market share plummet as Indians have gravitated to other chat services such as Facebook’s WhatsApp and Messenger, and competitor Truecaller.

So while India’s ban may sting a few Chinese firms, it’s not exactly the sort of blow that is likely to make Beijing rethink its geopolitical strategy. China has increasingly pressured India on multiple fronts, including using infrastructure projects to woo neighboring states such as Nepal, Sri Lanka, and the Maldives that were once seen as being firmly in India’s sphere of influence.

No, it seems the app ban is a largely symbolic gesture aimed at Modi’s own citizens, particularly hawkish members of his own nationalist Bharatiya Janata Party (BJP), who want to see their leader “do something” to counter China.

The app ban makes headlines. But it won’t keep China from further encroaching on India’s turf.

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.