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ByteDance may lose $ 6 billion due to Indian ban on TikTok

ByteDance is a prime example China is citing, threatening to move the WTO, while its own record in trade practices is abysmal, officials said

The ban on 59 Chinese mobile and desktop applications (apps), including the wildly popular TikTok, has shaken the economy of its base country. The ban may lead to a loss of up to Rs 45,000 crore (or $ 6 billion) for ByteDance. “The loss of Chinese internet company ByteDance, the mother company of TikTok, could be as high as $ 6 billion after the Indian government banned 59 Chinese apps, including Tik Tok following deadly border clash between India and Chinese troops last month,” according to a report in news agency ANI.

A source in ByteDance said that the company had in the past few years made an investment of more than $ 1 billion in the Indian market. He said the ban might bring its business to a standstill and cause losses up to $ 6 billion. A Global Times report says that the loss of ByteDance would exceed the potential losses of all the other apps combined.

ByteDance has, besides the short video-sharing platform TikTok, Helo, a social media platform for the Indian market and Vigo Video.

Meanwhile, the propaganda of Beijing that India’s ban on Chinese apps is “selective and discriminatory” is falling flat on its face with New Delhi sharing with the world, officials said, a long list of Chinese discrimination against trade and investments with certain countries, including India.

India is telling the world China has been indulging in restrictive trade and investment practices like the imposition of internet censorship through ‘Great Firewall’. Beijing also restricts, two officials working in two different ministries said requesting anonymity, long-term visa and non-tariff barriers on investments.

In New Delhi, the Indian Newspaper Society (INS) has slammed China’s action of restricting access to Indian newspapers and media websites. It has urged the Indian government to expeditiously take steps to ban access to Chinese media in the country.

The Chinese mouthpiece said on 2 July on Twitter, quoting China’s commerce ministry spokesperson Gao Feng, “To date, China has not adopted any restrictive or discriminatory measures targeting India’s products and services.”

Only the uninitiated need to be told that allowing or not allowing social media platforms in a certain country do not come under the purview of World Trade Organisation (WTO), where China threatens it would drag India to. The government in India, while banning on 29 June 59 mostly Chinese mobile applications such as TikTok, UC Browser and WeChat, cited concerns that these were “prejudicial to the sovereignty of India, defence of India, the security of the state and public order”. China, citing similar reasons, has kept Facebook, Twitter, YouTube and even Google search out of its territory, an official said.

A legal expert on strategic matters in the government said, “Beijing has no basis to challenge New Delhi’s June 29 decision. Is there any agreement on this matter with China? No, not to my knowledge. India can defend [it] easily under the clause of national security interest and sovereignty of the country. Therefore, the official Chinese reaction on June 30 was subdued and did not mention any bilateral or multilateral [WTO] agreement.”

Sino-Indian tensions have shot up after a violent brawl between Chinese and Indian soldiers on June 15 along the Line of Actual Control in Galwan Valley in eastern Ladakh in which 20 Indian army personnel were killed.

Chinese foreign ministry spokesperson Zhao Lijian had said on 30 June, “The Indian government has the responsibility to protect the legitimate rights and interests of international investors in India, including Chinese businesses, in accordance with market principles. Practical cooperation between China and India is mutually beneficial. Deliberate interference in such cooperation will not serve the interests of the Indian side.”

But principal adviser at law firm APJ-SLG Law offices TS Vishwanath says, “This decision is taken based on national security concerns, therefore, India is very much within its right in the WTO agreement to take any action to protect its national security interest.”

The second bureaucrat in the Ministry of Finance said China was indulging in illegal and unfair trade practices as such routing its goods through a third country with which India had preferential trade arrangements to avoid paying higher duty. He accused China and dumping of cheaper products in India to harm Indian industries. “The government is aware and agencies have been told to take action against such violations,” the official said.

Data demonstrate a substantive indirect inflow of Chinese goods and investments through locations with which India has free trade agreements (FTAs), preferential trade agreements (PTAs) or other bilateral commercial arrangements. They show the total foreign direct investment (FDI) from China is minuscule, but many Indian firms have received Chinese investments.

Similarly, officials said, imports from China have registered a minor decline recently, but imports from Hong Kong and Singapore have surged.

The latest official data show foreign direct investment from China between April 2000 and March 2020 was $ 2.378.71 billion — 0.51% of the total FDI inflow into the country in the two decades.

According to the Federation of Indian Export Organisations (FIEO), while India’s trade deficit with China narrowed by $ 6.05 billion to $ 51.25 billion in 2019, the gap with Hong Kong widened sharply by $ 5.8 billion in 2019, nullifying almost all the gains. Similarly, India trade deficit with Singapore was $ 5.82 billion in the previous financial year.

Sirf News Network

By Sirf News Network

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