New Delhi, 30th June 2020: A ban on 59 Chinese apps including Tiktok by the Indian government over security issues derailed Chinese company ByteDance $1 billion India expansion plan.
Tiktok app is owned by its parent firm ByteDance was removed from Google and Apple app stores in India after the Indian government announced on Monday that it was among the 59 apps which it believed posed a “threat to sovereignty and integrity”.
“If this is not rolled back, these companies would be constrained to cut back their operations in India, potentially resulting in a loss of employment,” said a lawyer who advises a Chinese company whose app has been banned.
China’s foreign ministry said it was “strongly concerned” about India’s decision, adding that India had a “responsibility to uphold the legitimate legal rights of investors including the Chinese companies.”
The biggest casualty of the move appears to be ByteDance, which has since last year hired several senior executives and laid out plans to invest $1 billion in India.
India is TikTok’s top growth market and accounts for 30% of users of its 2 billion downloads worldwide. Also, 10 percent of Tiktok’s revenue came from India.
TikTok said in a statement the Indian government had invited the company to respond to the ban and submit clarifications, adding that it complies with all data security and privacy requirements. It did not comment on the fate of its expansion plan.
When TikTok was banned briefly last year after a court said the app encouraged pornography, the company told the Supreme Court the ban cost it roughly $15 million a month. Several Indian lawyers said chances of success through a legal challenge this time were slim given the government had invoked national security concerns, meaning the Chinese companies can only hope to lobby to reverse the decision.
The ban has also left Tencent disappointed, which has apps on the market and is also a major investor in Indian startups, two sources aware of the company’s concerns told Reuters.
The Indian government passed a law in April that resulted in screening of incoming investments from border touching countries like China.
The biggest fear for the company is that the Indian government could possibly impose a ban later on the mobile version of its hugely popular game PlayerUnknown’s Battlegrounds.