The bedrock of attracting incoming investment is market stability. However, market stability is also based on informed policy-making, and several recent decisions in the realm of national security policy make us question if the government is indeed getting the kind of inputs it needs: be it national security, cyber security, and in a country struggling with post-COVID-19 recession-economic policy.
All of this starts with a chain of events — the banning of several Chinese apps following the tragic Galwan clashes of June 15. The list of banned apps has now crossed 200 (including cloned versions). This was followed by a news report of Chinese companies (and presumably Chinese intelligence) using open source information scanned form the social media profiles of Indian politicians. In response, India has set up a committee to look into this and report back in 30 days.
While it is natural for any government to weaponise economic tools during an outbreak of hostilities, the weaponisation must be based on rationality, first principles and a sound policy approach. Sadly the messaging has been quite the opposite — one of cluelessness and capriciousness. Why is this?
Take the app ban, for instance, and that of the social media app TikTok. It had access to sensitive personal information, such as bank account details due to the monetisation of its ‘influencers’, and as per Chinese law, it was bound to hand over such information to Beijing if requested on national security grounds. Unlike US companies that have routinely denied information to their government and had their right to do so protected by US courts, Chinese companies have no such rights given the farcical nature of the ‘rule of law’ in China.
Yet this was an app whose popularity was allowed to flourish and penetrate deep into India. This almost gives the impression that the app was banned not on grounds of national security, but rather to get back at China—and this, in effect, is normalising a dangerous principle that China could penetrate the private lives of Indians and create backdoors to the banking system as long as they didn’t target our men in uniform.
Calling the lack of calibrated action on security threats from Chinese apps prior to June 15 is not a case of criminal negligence — it’s much worse, a case of complete cluelessness. Look at the government response to allegations of cyber-snooping. The allegations themselves are unremarkable. Apparently a Chinese-owned company was scanning the social media and public profiles of eminent Indians and applying unspecified big-data algorithms. Now any country worth its salt, should be undertaking such activities; this isn’t even extraordinary, but basic intelligence.
What is surprising in the government’s response is that it not only did not know this was happening, but also that it could not get advice on the implications within 24 hours. Worse, it has to constitute a committee that would take 30 days to report back, on what is at best a rudimentary exercise carried out by an entry level cyber security employee.
None of this should surprise us. After all social media platforms have been blatantly abusing India’s intermediary guidelines with impunity and parliamentary panels set up to investigate have either been ignored or asked such basic questions as to render the whole exercise laughable.
Worse still, who can forget the fact that the Chinese had on two separate occasions compromised computers across Indian embassies globally where the camera and microphone could be remotely turned on. On both occasions it was external companies that detected and informed New Delhi of the breaches. Then there was the infamous WhatsApp snooping, where the perpetrator still unknown.
While several countries have proactively banned Chinese 5G providers, India slogged on giving them pilot projects despite the obvious security risks. Even after Galwan, the ban isn’t official, but just an unofficial rumour, with signs that 5G access could be traded in lieu of Chinese good behaviour.
All of this cumulatively adds up to an extremely embarrassing case of abysmal incompetence on cyber security issues, and is far from India’s aspirations of becoming a ’cyber superpower’. However, the effects on sanctions and market regulations by India, including app bans, is chilling to say the least. Foreign software companies are watching with alarm in a global digital market worth $25 trillion.
The app ban was absolutely the right thing to do, but the method, planning, policy and execution were clumsy and only served to signal severe market unpredictability to the outside world. This has to change, but I’m not holding my breath.
Abhijit Iyer-Mitra is a defence economist and senior fellow at Institute of Peace and Conflict Studies, New Delhi. Twitter: @iyervval. Views are personal
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