Walk with TikTok

Context: Instead, of military front India needs to act on the diplomatic front by choosing the strategic economic sanctions that can damage China economically without harming India itself.

Arguments favouring India’s Sanctions: Chinese App Ban

• In accordance with international trade rules: Being a non- military form of retaliation, it avoids violation of any treaty on trade. 

• Economic hurt to China: by denying China access through apps to its largest consumer base (1.3 billion people) in India.

• China’s future lies not in cheap labor-intensive goods but services.

• Chinese apps have 150 million monthly users in India.

• Limited collateral damage to India: 

• It will not raise Indian production costs or lower competitiveness. 

• China can ban Indian E-Commerce companies in retaliation, but these are so small in China as to hardly matter.

• Preserving Indian Integrity and Sovereignty: 
• Legal Provisions: Under Section 69A of the Information Technology Act (ITA), 2008, in light of activities prejudicial to sovereignty and integrity of India.
• MEITY has received many complaints about many mobile apps ‘stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers located outside India.
• Compilation, Mining and profiling of the data by elements hostile to national security and defense of India impinges upon sovereignty and integrity of India.

Arguments against Sanctions: Banning all imports from China

• Limit India’s access to: China’s cheapest, most efficient machinery, intermediate goods, and components.

• Weaken India economically: banning all or most Chinese goods will make India a high-cost producer state and will impact the expansion of Global Value Chains in India.

• Violated multilateral trade rules: Imposition of a blanket ban is opposed to the World Trade Organization’s rules which do not discriminate between member states.

• Junking of rules will be detrimental to the position of India due to increased arbitrary trade threats.

• Restricting unloaded containers from China at customs: will hurt Indian importers who have already paid for the consignment.

• Higher Prices for the consumers: due to higher import duties on simple consumer goods imported mainly from China (candles, kites, clocks, plastic toys) 
• New duties of up to 40% on solar panels, 80% of which are imported from China will help create Indian panel producers, but will also make Indian solar power much more expensive.

Way Forward

• Individualistic penal approach: instead of the blanket ban like mandating Chinese app providers to set up their servers in India and have a frequently timed reporting system to Indian authorities.
• Encourage Indian apps: to come upon similar functional trends. 
• No Indian app features in the Top 50 of any of the app monitoring lists despite the fact that many Indians are key developers in top apps globally. 
• Indian apps: Aarogya Setu (National Informatics Centre),  Bengaluru based app, Mitro and Remove China Apps.
• Emphasise role of the local language in the local app ecosystem.
• Balancing Non-tariff barriers: 
• Selective quality checks over Chinese power equipment to minimise their impact on Indian costs of production.
• Import duties with sunset clause: will ensure that only serious investors with long term export ambitions come in.
• Use of civil society: The Swadeshi Jagran Manch can urge people to boycott Chinese consumer goods
• Trade sanctions: must focus on internet services and consumer goods, while excluding capital and intermediate goods.

Conclusion: The fact remains that national interest and sovereignty remain a top priority. At the same time, the ‘free market’ of cyberspace is also crucial for its wider reach. Striking the right balance, therefore, becomes very pertinent.