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The Broken Tungsten: India’s ‘Digital Strike’ at the Chinese Economy

In its heyday, the relationship between the most promising economic centres of the East was captured by the slogan "Hindi Chini Bhai-Bhai". This era has certainly passed into a distant memory. The so-called brother nation states have rather settled for a ' bye- bye' and have diverged paths, where the only visible road ahead is the China Pakistan Economic Corridor.

Decades old tensions between India and China translated into a conflagration with the Galwan-Valley face off between the two nations on the eve of June 15, 2020 which involved casualties on both the sides. This incident pushed the bilateral relationship between the two nuclear powers to an all time low and transformed the LAC ( line of actual control) into a permanent hotspot. The brimming tensions have not only created a hostile environment in the physical space but has also paved its way into the digital arena. 

The ticking clock of tik-tok

The government of India, in a move, banned 59 Chinese mobile applications, including the top-charted apps like TikTok ( 611 million downloads from India) [The Hindu] , ShareIT, UC browser and Club factory amongst others. The ministry of information and technology on 29 july, 2020 invoked its power under section 69-A of the IT Act  to ban these applications which are " prejudicial to sovereignty and integrity of India , security of state and public order.

No more 'Chicken-Dinner'

On the night of 2 September, 2020 in yet another move, the ministry of Information and Technology banned another 118 mobile applications including the top-charted gaming app PUBG invoking the same article 69- A of the IT Act. PubG clocks about 13 million daily users from India with more than 175 million downloads altogether, which could lead to disastrous security and personal data breaches since the information lies at the disposal of the Chinese app creators and hence the Chinese government. This argument was cited by a lot of defence and security experts including commodore Shyam Kaushal 

The fusillade fired by the Government of India was forthcoming. For over a decade, Beijing had been following low-intensity trade war by crafting a mighty wall of non-tariff trade barriers using IPR's. This allowed foreign companies to enter the Chinese Markets only if they partnered with local Chinese ventures. Given the rising tensions brewing between nations in lieu of "security-breaches" in territorial as well as digital space, the Galwan-Valley face off acted as the last nail in the coffin for India to take such an overt step in the context of the ongoing pandemic.

The next step of the digital strike

The digital strike against China to counter its unwarranted territorial aggression is taking a turn towards its final destination. In tune with the 5G technology revolution, the Modi government is set to keep China's Huawei, ZTE out of 5G trials.

1G enabled us to make wireless phone calls, 2G brought in texting facilities, 3G gave web browsing to the masses via mobile phones, 4G facilitated wireless video streaming and developed GPS connections via satellites. In the era of 5G, data will move about 100 times faster (Times magazine). Machine-to-machine communication will facilitate a larger load of data transfer in a lesser lag time. This connectivity is already being called “the internet of things” where every gadget from your phone, television, car to entire ‘smart cities’ will be connected.Therefore the company's building and providing the 5G infrastructure will be able to access global data and use it at one’s disposal. 

Currently, Huawei, a chinese company is the largest provider of 5G telecom equipment in the world i.e- 35.7% according to the data provided by Dell’Oro an independent market research firm. Along with ZTE, another chinese telecom equipment manufacturer with about 13.2% of 5G equipment, the two chinese firms hold up about half of the global 5G market.

This has caused major concerns for politicians in the UK and the US as these networks which rely on chinese firms could allow snooping and sabotage by the chinese government. 

British prime minister, Boris Johnson in January 2020 de-escalated the role of Huawei in Britain’s 5G infrastructural game and to remove the equipment already installed by 2027. The new progress report on implementation of European Union's “5G Toolbox” risk mitigation framework recommends to phase out “high risk suppliers”. 

This was followed and supported by new salvo of sanctions placed by the US on June 15th, 2020 as a worldwide campaign against Huawei. This campaign is also echoed in the policies of many countries avoiding 5G equipment from Huawei or ZTE. These include Australia, Canada, Singapore and most recently France. In tune with the trend the Modi government has decided to delay the 5F Huawei trials lined up in India. In the words of Robert Hannigan (former Director of GCHQ) ‘This is a dilemma where a technology superpower whose values are fundamentally opposed to a country's interest’ .

Even though there are counterparts to the chinese telecom providers like Nokia, Ericsson, Cisco etc, they are mostly American and have spurred doubts in the EU to be dependent on american might. Nevertheless, this US-China war on 5G has caused a loss of 12 billion dollars to Huawei already (gizmochina). India has most recently joined the war by stopping the roll out of Huawei’s  5G trials.

The intent behind these conspicuous actions was to clearly hit the Chinese economy. The loss of ads from one of its biggest markets will definitely leave a dent if not a crater on the Chinese economy while at the same time, the vacuum created will encourage the Indians to develop their own counterparts and to recognise the long existing yet ignored “Made-in India” applications. Ananth Krishnan, China’s correspondent for TheHindu pointed out, India accounts for 0.03% of TikTok’s parent company ByteDance’s global revenue. Thus, banning these apps might not cause  a huge economic impact on China in the short term but rather, would carry long-term economic impact in terms of  valuation, marketing and research. This would result mainly from the Chinese deprivation of a treasure trove of Indian citizen data.

Supplementing the digital strike, the Indian government also procedurally  altered its FDI policy, wherein companies from countries sharing a land border with India can only invest post government approval. This is most certainly targeted towards China since due to the limited investment capacity of India's other land neighbours.

Given the series of salvos by the Indian government, it has now become important to see how the “Dragon State” retaliates. As commodore Kaushal explains, ‘a country has 4 possible avenues of action- political, diplomatic, economic and military’. In the light of recent events it is clear that the latter two avenues are filled with tumultuous happenings. At the other end a series of diplomatic discussions have been initiated by the envoys of both the countries in Moscow.

All heads are turned to see the fluctuating Sino-Indian relations as new conflicts are emerging on the LAC everyday. Thus, the long established peace is coming to a halt with an unforeseeable future. How will China retaliate to India’s ‘digital strike’? Will the two nations be successful at alleviating their ongoing differences? Only time can unravel. 


By Amisha Budhraja

Amisha Budhraja is a third year political science student who loves to read vogue apart from debating on political