India Bans 59 Chinese Apps Citing Security Reasons; Are Chinese OEMs Next?

The Government of India has banned 59 Chinese apps including the popular video-sharing app TikTok and UC Browser citing security concerns. As per the intelligence agencies, these apps were collecting user data and violating the terms of usage by storing the information on servers outside Indian borders.

"The compilation of these data, its mining, and profiling by elements hostile to national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India, is a matter of very deep and immediate concern which requires emergency measures. At the same time, there have been raging concerns on aspects relating to data security and safeguarding the privacy of 130 crore Indians," said the government in a press release.

Ban To Fuel Indo-China Sentiments?

Major apps to face the ban include TikTok, Sharit, UC Browser, Baidu, Shein, Clash of Kings, DU battery saver, Helo, Likee, Xender, Mi Community, Virus Cleaner, and others. The Indian Government's recently created TikTok handle was also deactivated just moments after the announcement.

The move comes after the recent clashes at Ladakh's Galwan valley with Chinese troops where 20 Indian soldiers were reportedly killed and several were injured. The move will further louden the countrywide call for boycotting the China-made products and encourage local goods manufacturers.

India To Boycott Chinese OEMs?

This brings us to the question that whether Chinese OEMs are next in line? As the chants for banning Chinese goods get louder nationwide, India that saw immense growth in smartphone manufacturing with billions of dollars of investments and millions of new jobs, might have to wait to fulfill its 'Digital India' dream if the relationship between the two countries continues to deteriorate.

While the Indian market is dominated by Chinese smartphone brands such as Xiaomi, Realme, Oppo, Vivo, OnePlus, Huawei, and others, homegrown brands like Micromax, Lava, Karbonn, and Intex have lost their hold substantially.

According to the last reported market share by Counterpoint research, Micromax had 1.1 percent, Intex grabbed 0.1 percent, Lava at 1.2 percent, and Karbonn had 0.2 percent. In turn, the Chinese manufacturers garnered 72 percent in 2019. These Indian firms are expected to make a comeback sometime soon, considering the growing demands for local products. But nothing can be said with certainty at the moment.

Is India Ready For The Shift?

Besides, completely banning these Chinese firms would also mean a huge loss of jobs in the country. Xiaomi has set up seven manufacturing plants in the country employing more than 25,000 people and plans to invest another $500 million to strengthen its foothold. Realme claims to have created 7,500 jobs in the country and has promised to increase the number of employees to 10,000.

Similarly, Vivo has committed Rs. 7,500 crore to aid its India expansion plans and TCL has promised Rs. 2,200 crore to set up plants to produce mobile handsets and TV displays.

It's evident that Indian companies need to have a strong foothold in the electronics manufacturing department to eliminate outsourcing of components, but that's a farfetched dream at the moment. As per ICEA, by 2025 the country can make $100 billion in mobile phones and close to $40 billion exporting components.

India has come a long way from having just a couple of mobile phone plants in 2014 to become the second-largest producer in the world. Instead of boycotting Chinese products, it would be logical to boost domestic manufacturers alongside and help them recover to build a more secure and self-sufficient future.