Hello Readers!

Last Evening on 29^th June 2020, our government announced a ban on 59 Chinese mobile applications, including top social media platforms such as TikTok, Helo, and WeChat, on the grounds of National Security.

As per the government, these apps are a threat to the country’s “sovereignty and security,”, as government cited complaints about data on Indian users being transferred abroad without authorization. Further, the government added that these applications are engaged in activities “prejudicial to sovereignty and integrity of India, defense of India, the security of the state and public order.”

The government said, “The ban has been imposed under Section 69A of the Information Technology Act read with relevant provisions of the Information Technology (Procedure and Safeguards for Blocking of Access of Information by Public) Rules 2009”.

Well, we can also say that this ban has been a major step taken by our government, amid rising tensions between India and China following clashes at the border two weeks ago.

These apps were operated by Indian users on a large scale. In a survey it has been analyzed there were 300 million unique Indian Users of Chinese Internet apps. Here I am giving a figure depicting the number of using Chinese mobile apps in India.

Now here the question is how is this decision going to affect the people in India, what will be its advantages and is there any drawback of this decision?

Let us know everything in detail.

WELCOME MOVE

This decision of the government has been welcomed by many, and many Indian App makers are taking this as an advantage to grab the space left by the likes of TikTok and ShareIT.

InMobi, the ad tech company that owns Roposo, a video app that competes with TikTok, said the move would open up the market for Indian Apps like Share Chat, Chingari, and many.

Sumit Ghosh, Co-Founder, and Chief Product Officer, Chingari, said, “This is a very good step taken by the Government of India and the IT Ministry. For a very long time, TikTok has been spying on users and sending back the data to China. We are happy that this step has been finally taken. We would like to welcome all the users of TikTok to come and try our Chingari, which is a 100 percent India grown app, and made for the passionate Indians.”

Prominently this decision of the Chinese’s app ban in India is going to a boon for Indian App makers. A lot of apps in India are inspired by the deft engineering of Chinese apps. At the time when Chinese apps are banned in India, it is a chance for Indian apps to develop and modify themselves and capture the vacant space left by the Chinese apps in the Indian Market. The benefit will be, whatever profit will be gained will remain in the Indian market. Ultimately this will give support for a bounce-back of Indian Market.

The move could also come as a blow to China’s Digital Silk Route ambitions, eroding the valuation of the companies. This major step taken by India could also give gear to many countries to act against these apps.

LEGALLY SOUND

Many analysts say this decision of the Indian Government is going to affect these Chinese apps badly as there are a large number of Indian users of these apps.

As per them, this will put enormous pressure as these apps were heavily reliant on the Indian Market. They also said that this decision of the Indian Government, sounds good from the legal perspective, because grounds like national security are difficult to challenge in a court of law.

COMPETITION WILL COME DOWN

Investors in Indian social apps say that competition will come down due to the ban on Chinese apps.

As per Deepak Gupta, founding partner at WEH Ventures, “after the ban of Chinese apps in India, Overall the ecosystem's ingenuity will slow down, as there will be no competition in the market.”

Well, the coming time will however tell what impact the ban on Chinese apps in India is going to impose on the Indian Market and Indian People Lifestyle. Here what we can advise is now it’s time to initiate the moment, “vocal for local”.

As of now Chinese apps are banned, we request go downloading and using Indian apps. Do leave your query or review, so that the app makers could modify it as per your convenience.

For any kind of investment query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).