Chinese tech trade faces more problems in India

Chinese tech trade faces more problems in India

There’s further bad news for Chinese technology companies in India as more apps are banned, access to government contracts is limited and Chinese smartphone brands experience a decline.

In the wake of the recent banning of 59 Chinese apps, Indian news reports say that another 47 have been banned by the government, on the grounds that they are ‘clones’ of the 59 already banned. The names of the banned apps include Tiktok Lite, Helo Lite, SHAREit Lite, BIGO LIVE Lite and VFY Lite.

Security was cited as a reason for the earlier bans. In fact the Indian press has suggested that more Chinese internet companies could be banned soon.

However, that’s not the only bad news for Chinese companies. According to TeleGeography's CommsUpdate, the Indian government has also imposed new restrictions preventing companies registered in countries that share a land border with India from bidding for public sector contracts ‘on grounds of defence and national security’.

It takes little guessing to work out that this is going to have an effect on Chinese equipment. The restricted nations will still be allowed to bid for government contracts but only if they register with a new authority in India that will be set up under the Department for Promotion of Industry and Internal Trade.

This follows the news late last week that supply difficulties contributed to a fall in the share of Chinese smartphone brands in the April-June quarter of 2020, according to a report by Counterpoint Research.

Though some there have been some suggestions that anti-China sentiment, caused by the recent tension between the armies of the two countries in eastern Ladakh, was a contributing factor, India’s smartphone shipments as a whole declined by 51 percent year-on-year to just over 18 million units in April-June. And of course the lockdown meant no shipments during April and little or no factory activity.

That said, the last week of the quarter saw components being held up at customs, which also impacted the supply chain, and this activity does seem in part to have targeted Chinese goods.

However, whether there will be a long-term effect on Chinese smartphone brands, many of which are attractively priced, remains to be seen.

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