 Hello and welcome to NewsClick. Today we're going to discuss the app ban. And this is the third set of apps which have been banned by government of India. The first wave comprised of about 59 apps. The second was 47. And this round seems to have included 118 apps. The bulk of this apps which have been banned, or those which have a very large user base, are from 10 cents. Of course, we'll come to what are the implications of this ban later. But let's look at, first, broadly, what are the apps which have been banned. And if you look at it, there are a number of WeChat versions, different versions of WeChat which was there. So this has been targeted at closing whatever loopholes might have been there in the earlier banning of the apps, of a specific set of Chinese apps. All these, or almost entirely all of these are essentially Chinese apps. So WeChat, effectively, is banned in all its avatar from the Indian market. This ban seems to have been more targeting the 10 cents ban. 10 cents apps being banned. And out of this, the biggest in this range was what is called the gaming app. Now, we have to understand two things about the market banning of apps. One is, of course, the grounds on which it is in ban. The second is, what are the implications? For instance, the Chinese companies who have also invested a lot of money in the Indian stock market or making investments, particularly in the startups. 10 cents has made a lot of investments in Indian market. One of that is in Ghana, the music streaming app owned by Times of India. It seems to have made $150 million investment in this particular app. And 10 cents owns 35% of the company. Similarly, it has also bought in to another Times of India media streaming company, what's called the MX Player, and has invested 110 millions in this app. Now, it's interesting, the Times of India, which is with the beneficiary of 10 cents, has also been asking for India's, India taking strong action against China, banning apps, and so on. So the money is welcome, but otherwise they should be kept out of the market. It seems to be Times of India's position. So there seems to be a certain degree of ambiguity with which the market players are reacting to that, appearing to be nationalistic. But behind that is a concern, particularly the startup community, that it stars the Indian entrepreneurs of a particular kind of investment coming from 10 cents, Alibaba, and these kinds of Chinese companies who are interested in the startup market. In fact, the startup market in India has benefited a lot from Chinese investments. So that investment is really going to come to an end. And comparatively, other companies, other players in the international market has not invested heavily in the Indian startup business. The second part is, who are the beneficiaries of this particular decisions? The government of India has talked about that defense is the reason that these apps have been banned. And the reason they have given, and that's an important one, the reason they have given is that this is targeted at those companies who give apps to us and various complaints have been received according to the government of India notification about the misuse of the apps for stealing and surreptitiously transmitting users' data in an unauthorized manner to service at a location outside India. Now, this is almost word for word, the same that was used against TikTok even in the United States. The problem with this formulation, and this is a blanket formulation, that this would apply to almost any app that most apps do take users' data, they do not take authorization, and they have locations, the servers are located outside India. So this is therefore, selectively being only used against Chinese apps. And obviously it has to do with a geo-strategic battle, particularly in the border, northern border of India, where we are having a standoff. And this app ban is more or less a tip for tat, as it were, of what is happening on the northern borders. If there is a tension that is rising, India seems to be taking action, not only in the northern border, which has been reported that we are trying to block the Chinese over there, we believe they're doing unauthorized action. I leave that out, because I think that's a much bigger issue. But our response seems to have been to punish the Chinese by blocking the Indian market, both for investments as well as for data. Now, as I said, if data is the issue, we'll come to that. What does it mean for India, and particularly for Indians residing here? How do you protect our data, not only from Chinese companies, but all international companies located outside India? Are we saying that Indians data, this is perfectly okay to transfer it to places abroad, surreptitiously, but it should not be done by Chinese companies only. So this is an issue that we need to explore a little further, which I believe. But the key issue is that this is a geostrategic response, punishing Chinese companies for the tensions we are having on our northern border, and this therefore is something which is not going to be resolved by any Chinese company coming to India and saying, look, we could have all our servers here, allow us entry to your market, treat us like any other Indian company, we can invest in India as well, and so on. This is not the basis on which we are really banning the apps. Apps are being banned specifically as a geostrategic response to China. So that I think should be clear. What are the consequences of this that if we do use our national security as an economic argument, then is it possible that China can retaliate? India's position seems to be that we sell much less, China sells much more to us, therefore, we can hurt them much more than they can hurt us. Therefore, if we do this kind of action, the quid pro quo will not harm us that much, it will harm China more. Of course, it is also true that while it's correct that India buys much more from China than it sells, but it's a proportion of Chinese trade. Indian trade is relatively much smaller, there's a percentage of its total trade than Chinese market is to Indian exports. We export nearly 15%, I told 15% of our export goes to China, that means their share is 15% in our exports. India share on the other hand, from Chinese exports is relatively much below 15%, it's about 6% or so. Given that China does have also the ability to punish India in a cross sector retaliation. So we leave that point out because essentially should you be using trade as a means to punish China for these northern skirmishes, northern border skirmishes, this is something that we have to think about because it seems to be going down a path which might lead to a reaction which will then again lead to an Indian reaction and the stick for that battle can mean economically disengaging from China. And if we do, then let's face it, a lot of our exports to other countries in the world depend on imports from China. And if we have to substitute those imports, then it can also affect our markets elsewhere. So this is something we have to think through very carefully, not the way we are going in which case, in which we are really banning apps after apps in the belief that there is no sectoral retaliation they can do because China does not use much Indian apps. Coming back to the basic issue that has been raised that apps transfer data, users data in an unauthorized manner and to servers outside India. Now, this was, as I said, was also the TikTok argument that Trump gave in his notification why he wanted TikTok to either close operations or to sell to local companies, local companies meaning American companies. And Facebook, in spite of the fact that Facebook was the one who had campaigned against TikTok and wanting TikTok to be thrown out of the American market, said, hey, this is not a good argument because if this is the argument given, then we as well as Google, as well as any other American company which deals in data can then also be penalized exactly on the same conditions because we do exactly what TikTok is supposed to be doing. So the question is transferring data outside the countries in which they're operating. If that is supposed to be something wrong, then every American company which deals in data and will come to the importance of data today would also be in the same boat. So this argument is being very selectively used arguing only Chinese apps have this problem as if other apps don't. We have a data localization framework that we are trying to build in which we are also talking about critical data, certain class of data being localized in India. Now, if it happens as a part of a larger set of Indian laws, I think that would be welcome. But making laws on the basis of immediate provocations or immediate tensions on our borders is perhaps not the best way to go when you're trying to build a legal framework for people's privacy. And let's face it, data, personal data is basically data privacy issue on which you have a law that is supposed to be passed in the coming months. We'll not get into that today, but let's get into the other issue. What are the financial implications of this ban in terms of who gains, who loses? Obvious loser is Tencent, they lose the Indian market. And who are the gainers? Now, here is the issue that all companies, all major internet players, what are called digital monopolies today, they essentially use data. What is the data they use? Users data. Their strength comes from the users data that they have. The network relationship between users they can see and using that to drive either advertising revenue or in the case of the Amazon, for instance, marketing. Of course, Apple is a slightly different company in this. Apple has its Play Store, which of course it gets a cut out of that, but Apple has a very large position in terms of the hardware, software combination, products itself. But when you come to other companies, whether Amazon, when you come to Google, when you come to Facebook, the three other main companies that were present, hauled up before the US Congress, all these three companies depend as their lifeblood, so to say, on users data. So if users data is a commodity and today it is, it is the one which is fueling the rise of the digital monopolies in the world. If we look at just the size of 10 cents, for example, this is a nearly $700 billion company in terms of market capitalization, as opposed to Facebook say $800 billion. So it's very close to Facebook in terms of size. What we are doing is, we are saying Facebook is okay, but Alibaba is not, WeChat is not, 10 cents is not, we are really choosing sides, that Indians data in the hands of American companies is okay, when the hands of Chinese companies is not, it's really making gift of India's users data to companies like Facebook. Of course, Facebook has been in the news recently, particularly with this relationship with the ruling government. We also know that, in fact, the move against ByteDance TikTok was also pressed by Zuckerberg. Facebook was interested in a campaign against it, so that it would be kicked out of the American market, because a felt TikTok was a threat to its user base. Is something like this happening in India today? Are the companies who are being identified as the companies who have to be sanctioned in India? Are they being identified by due to basically based on our needs? Are they being identified companies which are hostile to the Chinese companies, see themselves as competition? Are we also fulfilling their agenda? That's a question we need to answer. Hopefully this is something which is specific to our interest as perceived by the body government, but then the question is that while we are willing to freeze out the Chinese from the Indian market, what is it that we are doing to provide a market that will help Indian industry? It's very clear the Chinese, the great firewall of China, protected their users data. That is what allowed Alibaba, that is what allowed Tencent to grow in the size that they have, or even ByteDance and the TikTok app, for example. Now, if we don't protect our users market, and if we say the Chinese are not welcome to it, Americans are, then what we are doing is we are bartering our users data, Indians' users data for basically nothing that we are going to get out of it, because we are handing over the advertising revenues. Let's not forget, Facebook's main strength, main revenue comes with advertising. So does Google's. So we are handing over an internal advertising market to these companies completely. And in the long run, it means the Indian media is going to become more and more weak because it cannot confront what the Facebook's and the Googles of the world are doing. Let's not forget that the main threat to the media anywhere in the world comes from Google and Facebook. And therefore we are handing over our media in the long run to these companies. And that is a huge consequence for democracy. It is a huge consequences for our independence itself. So I think we have to read the app ban, not simply as app ban, but you have to read the app ban that we are trying to choose sides globally, but we are not willing to choose our own side, how to protect our people's data from any foreign company. And I think that's the key issue that we need to address right now.