Millions of China-branded smartphones sold in the country are likely to capture far more sensitive user data than standalone apps and require greater scrutiny, as does telecom gear from Huawei and ZTE
Citing threats to its national security and sovereignty, India on June 29 ordered a ban on 59 Chinese apps including TikTok because they are “stealing and surreptitiously transmitting users’ data” to foreign locations, the Ministry of Information Technology said. The action comes amid deadly border clashes, and a variety of retaliatory actions by both countries. A similar crackdown any time in the past few years would have raised few eyebrows, because the suspicions are hardly new.
Many Chinese apps are highly intrusive, and Beijing’s mega data collection practices are well known. Just one Chinese company — Global Tone Communications Technology — is believed to collect data that is the equivalent of 20 billion Facebook photos, or 2.5 photos for each person on the planet, in 65 languages.
Still, India’s app ban is largely symbolic, and neither necessary nor sufficient to strategically address the long-term information threat from China. This is because app bans are hard to implement. Just this month, Russia reversed a two-year-long ban on the Telegram messaging app because it barely made a dent on its use in the country.
IT infrastructure is incredibly complex but easily manipulated. Even if Google Play Store were to block the download of these 59 apps in India, they could be distributed through any number of unauthorised app stores. It is also hard to block usage of already downloaded apps because they can be used via virtual private networks (VPNs). Developers can also cleverly redesign the apps to skirt regulatory firewalls, change IP addresses and route traffic through different countries. Or they could so enmesh the banned apps with others that it is impossible to take down one without causing the collapse of other critical ones.
Far more than the apps, cheap Chinese smartphones likely pose a greater threat. Last year, Indians bought over 150 million smartphones. Of them, up to 80 percent came from China. Just one Chinese company enjoyed a 42 percent share via its three brands — Vivo, Realme and Oppo. India has virtually no oversight of these devices, the apps installed in them, or the functionalities of the apps.
Given the geopolitical scenario, India needs a strategic telecom roadmap that addresses China-made devices such as phones, tablets and laptops; telecom equipment from Chinese companies such as Huawei and ZTE; and mobile apps originating in that country. Each has a different dimension and, in two of the three cases, significant additional cost.
Today, only a third of Indians own a smartphone. It means about 800 million will buy smartphones in the years to come, likely at a rapid pace because it is seen as a critical professional and personal need. Increased smartphone penetration is also a key driver of economic growth.
Even if cheap China-made devices are to be curbed, rather than banned, India needs to create affordable alternatives. This, contrary to recent policy, might require duty cuts on phones from other countries such as South Korea or the United States, or concessions to local makers. Another option would be to replicate the US telecom model in which a locked handset is given away at low cost in lieu of service contracts. That would make smartphones more affordable.
For telecom infrastructure, India might have to bite the bullet and phase out cheaper China-made gear for its 4G and upcoming 5G networks. Until the recent border row, India had ignored US calls to ban Huawei gear on national security concerns. Prudence suggests a detailed review. Just this month, former Google chairman Eric Schmidt — now the chairman of Pentagon's Defence Innovation Board — confirmed the worst fears about the Chinese telecom company.
"There's no question that information from Huawei routers has ultimately ended up in hands that would appear to be the State," Schmidt told a BBC Radio 4 documentary from his vantage position in the US defence establishment. “However that happened, we're sure it happened,” he added.
Various estimates suggest that 5G equipment from suppliers such as Ericsson and Nokia could raise costs by up to a third. That is significant, running into hundreds of millions of dollars, and will necessitate sharply higher telecom tariffs in the world’s cheapest market. India could adopt a secure cut cheaper option pursued by many other countries — eschewing Chinese technology in the sensitive ‘core’ of 5G networks, but allowing it elsewhere in their infrastructure.
In retrospect, oversight of the Chinese apps is actually the easiest part of the puzzle. It only requires incremental scrutiny over what is already done by Google Play Store and Apple Store, and then it is relatively easy to address data collection and transfers.(Bala Murali Krishna works for a New York-based startup. Views are personal.)