India Concerned Over Dominance of U.S. Internet Companies

Some Indian leaders are resisting the dominance of U.S. Internet platforms and services such as Facebook’s WhatsApp, Google’s Android mobile operating system and Amazon’s e-commerce business, calling it a form of colonialism and vowing to regulate these foreign companies, especially regarding what they do with users’ personal data and how they might undercut prices offered by local businesses. India’s smartphone market, second largest in the world, is dominated by offerings from China, Taiwan and South Korea.

The New York Times reports that, “as India sets the new rules of the game, it is seeking inspiration from China,” admiring “Beijing’s tight control over citizens’ data and how it has nurtured homegrown Internet giants like Alibaba and Baidu by limiting foreign competition.” But India doesn’t want to go as far as China, specifically not pushing out “the American Internet services that hundreds of millions of Indians depend on.”

For foreign tech companies, India’s 1.3 billion people represent their “next frontier for growth,” meaning they are likely to comply. “Everyone is going to fall in line and do what is necessary,” said TechLegis expert in international technology law Salman Waris. “These companies have to do it in China and Europe, and they will do it here.”

Last summer, India’s Supreme Court stated that, “Indians have a fundamental right to privacy and pushed Parliament to pass a data privacy law … [and] Prime Minister Narendra Modi and his B.J.P. party have embraced an India-first economic nationalism to address weak job growth ahead of elections next year.”

Indian law enforcement also wants “more legal tools to extract private customer data from WhatsApp, Facebook and financial firms … [and] the Ministry of Electronics and Information Technology has demanded that WhatsApp create a way to track and stop mass messages, such as a series of false items about child kidnappers that led to the murder of two dozen innocent people by angry mobs.” WhatsApp refused, and the government is “holding up a new Indian payments service from WhatsApp until it complies with local laws.”

VentureBeat reports that Chinese, Taiwanese and South Korean phone manufacturers dominate market share in India. Counterpoint reported that 42 different smartphone models debuted there in July, up from 25 models in the same month last year. The leader is Xiaomi, “which last year ended Samsung’s five-year-streak as the top phone vendor in the nation,” and has “aggressively undercut the offerings of its rivals by selling inexpensive but high-quality smartphones in India.” A Xiaomi spokesperson said India is “currently its most important market.”

Other top Chinese phone makers in India include Oppo (7.6 percent market share), Vivo (12.6 percent), and Transsion (5 percent). Altogether, Chinese phone makers control two-thirds of the local Indian smartphones market, which, said analysts, is due to the level of commitment to that market, by making “major investments in local manufacturing and assembly, helping to create new jobs for Indians and opportunities for small and medium businesses.” Xiaomi stated that over 95 percent of its phones sold in India are made in India.