Ban on apps discriminatory under WTO rules: Beijing
China said on Thursday it hopes India would correct its “discriminatory” actions against Chinese companies, three days after the latter banned 59 mobile applications, mostly Chinese, amid border tensions between the two countries.
At an online briefing, Chinese commerce ministry spokesperson Gao Feng said India’s actions violated World Trade Organisation (WTO) rules, according to agency reports. Gao underlined China has not adopted any restrictive or discriminatory measures against Indian products and services.
India banned the mobile applications on Monday, saying they were “prejudicial to sovereignty and integrity of India, defence of India, the security of the state and public order”. HT has reported the ban was under discussion since early last month and the June 15 face-off between Indian and Chinese troops in Ladakh’s Galwan Valley hastened it.
A Chinese economist with a leading Beijing-based think-tank also said that India’s decision violates WTO rules. “Hi-tech FDI from China legally flew into India, and was welcomed by the Indian government. But now, without going through any legal process or necessary warning, the Chinese FDI has been blocked overnight.”
Asked if the ban on Chinese apps will impact foreign investments to India, the foreign ministry spokesperson Anurag Srivastava said, software and internet application firms in India “have to abide by rules and regulations issued by the relevant ministries and departments, including those pertaining to data security and privacy of individual data.” India welcomes foreign investments and has one of the most open FDI regimes, “but this will have to be in accordance with the rules and regulatory framework established by the government,” he added.
But Biswajit Dhar, a professor of economics at Delhi’s Jawaharlal Nehru University, said there is no obvious ground for the Chinese to sue India in WTO over banning of these apps. “The apps are not likely to be protected by any forms of IPRs. Chinese firms could have claimed the apps as their assets, but we don’t have an investment treaty with China & investments are not under the WTO’s purview. Had we joined RCEP (Regional Comprehensive Economic Partnership), which includes an investment agreement, things would have been different,” he added.
Gao’s remarks came two days after the Chinese government said it was “strongly concerned” about the ban and added the move was against “India’s interests”.
“China is strongly concerned about the relevant notice issued by the Indian side. We are checking on and verifying the situation,” foreign ministry spokesperson Zhao Lijian said at the regular ministry briefing on Tuesday.
Zhao reminded New Delhi of its responsibilities towards foreign companies. “The Indian government has the responsibility to uphold the legitimate and legal rights of the international investors, including the Chinese ones,” he said. He added China has always asked Chinese companies to obey international rules and local laws.
The ban is expected to pose “a big stumbling block” for Chinese internet powerhouses, which bank on sheer user numbers and online traffic to gain a market position overseas, Raymond Wang, a global partner at consultancy Roland Berger, told state-controlled newspaper China Daily.
“India, the market with the second-largest population worldwide, is definitely lucrative for sectors that compete for market scale and share,” Wang said. “That advantage could be wiped out in the foreseeable period of time.”
A China Daily report said India accounted for roughly 30% of TikTok’s 611 million downloads, citing analytics firm Sensor Tower in April.
Counterpoint, another technology research house, said Chinese smartphone makers, currently claim more than half of India’s smartphone market.
(with inputs from HTC in New Delhi)