Chinese apps banned, import delays hit Indian industries

01, Jul. 2020

Protesters burn Chinese goods during a protest in New Delhi on June 27, 2020. (PTI)
Protesters burn Chinese goods during a protest in New Delhi on June 27, 2020. (PTI)

By Atul Ranjan

NEW DELHI, NNA - Chinese-origin products and services have increasingly come under intense scrutiny in India after the country banned 59 Chinese apps and tightened customs checks on imports amid escalating tensions over border troubles with its communist neighbor.

Reassessing China policy in a tit-for-tat, the Indian government on Monday announced the ban of the mobile apps, including the popular video sharing platform TikTok, alleging their involvement in activities “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order”.

Chinese imports have already come under heightened checks by customs at Indian ports, causing clearance delays which affected some local industries heavily dependent on supplies from China such as electronics.

Players in the pharmaceutical industry are also worried about the quality of their finished products. Some consignments had been delayed far too long and some found opened in unsterilized conditions, which would affect the efficacy of their products, they told local media.

In the series of counter-measures seen largely as political, India is also reportedly planning to increase scrutiny of all power equipment from China to check for malware that could be used to trigger electricity grid failures.

Caught in the diplomatic spat between the two countries, local industries have begun sounding alarm bells about supply chain disruptions.

According to the India Cellular and Electronics Association (ICEA), delays caused by custom checks first came to light on June 22 at the Chennai airport in the southern Indian state of Tamil Nadu, and such occurrences have now spread to other ports and airports across the country.

“Our members have informed us that even though there are no written orders by the government, customs will now start 100 percent examination of all China-origin consignments,” the country’s apex body for mobile and electronics industry said in a June 24 letter to the Ministry of Finance to express its concerns.

The association told the government that further disruptions would cause acute shortage of raw materials after it highlighted that freight forwarding and clearing agents had advised that global exports to India be stopped till the situation improves.

“In essence, the global supply chain from the point of origin is beginning to slow down, as it did in the initial days of the COVID-19 lockdown,” ICEA said in its letter.

An official from the Chennai-based All India Manufacturers’ Organisation (AIMO), who spoke on condition of anonymity, told NNA that many of its members are facing the brunt too.

The Society of Indian Automobile Manufacturers (SIAM) also voiced concerns after manual inspections of imported consignments at ports affected the timeliness in the supply of raw materials to the industry.

“Inordinate delays in clearance due to congestion at ports could eventually impact manufacturing of vehicles in India,” Rajan Wadhera, president of SIAM, said in a statement.

“The industry is piecing itself together as growth is limping back; any further disruption at this juncture is best avoided,” he added.

Last week, a report by news agency PTI said India might check all power equipment imported from China for malware.

“Power is a very sensitive and strategic sector for any country. Electricity runs all industries, communication systems and all databases including strategic ones and so we have to guard it against any sabotage by countries which are adversaries or possible adversaries,” the news agency said, quoting the country’s Power Minister R. K. Singh.

Pankaj Mohindroo, chairman of ICEA, told NNA that the government is now actively taking steps to clear bottlenecks at ports.

Tarun Pathak, an associate director for India office of research firm Counterpoint Research, told NNA that ongoing tensions between the two countries, compounded with economic woes caused by the coronavirus pandemic, could have forced the government to retaliate in a way which would hurt China the most, just like U.S. trade restrictions on China.

On the banned apps, he said, “Some of these apps have been installed on hundreds of millions of smartphone users…roughly one in three active smartphone users will be impacted.”

It will "further fuel the ongoing anti-China sentiments and users will proactively start deleting apps from their smartphones,” he added.

He suggested that Chinese companies owning those apps should address any data security and privacy issues raised by the government before they are allowed to operate in India again.

App makers are reportedly in talks with the Indian government while TikTok has firmly stated that it does not share any data with the Chinese government.

China has slammed India’s decision to ban Chinese mobile apps as “selective” and “discriminatory”.

The Chinese embassy in India said in a statement on Tuesday that the action “runs against fair and transparent procedure requirements, abuses national security exceptions, and suspects of violating the WTO (World Trade Organization) rules”.

India has continued to see angry protests calling for a boycott of Chinese products after weeks of a border stand-off in the Himalayas led to a savage brawl between soldiers of the two Asian powers on June 15.

It resulted in 20 deaths on the Indian side but China has not reported whether it suffered any casualties. The incident took place in the disputed Galwan Valley in eastern Ladakh.