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Liu Zongyi
Associate Research Fellow
Center for Asia-Pacific Studies
Institute for International Strategic Studies
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Apr 01 2021
India’s reported blocking of ByteDance’s accounts would be robbery
By Liu Zongyi

China-based technology company ByteDance, following its video-sharing platform TikTok being banned last June, has reportedly encountered a new round of crackdown in India, with at least two of its bank accounts being blocked for alleged tax evasion.

ByteDance has asked a court to quash the directive that it fears will hit its operations. With 1,300 local employees, the company, in a court filing, said the blocking decision was an abuse of the legal process and would make it hard for it to pay salaries and taxes, Reuters reported, citing anonymous resources.

Information has yet to be confirmed, but it would not be a surprise event as similar incidents have happened to foreign firms in India with authorities using tax evasion as excuse to simply plunder assets from foreign businesses. And holding such a comprehensively exclusive attitude toward foreign capital, New Delhi has put the shackles on its ambitious "Digital India" campaign.

India has banned over 200 Chinese apps since last June, including TikTok which brought in a brand new type of business - short video sharing platform - into the populous nation and swiftly took over the market.

Coming at a time when tension between China and India was high on the border, the bans was largely seen as an attempt to gain leverage in negotiations with China. It also tried to seek economically disengagement with China to cater to feverish economic nationalism in the country.

As a country known for its economic nationalism, India has largely viewed its market as an exclusive domain where foreign investors are allowed to offer financing, but not to gain benefits. Western investors have seen relatively friendly attitude from the Indian government, but the real intention is still to grow its own industries with the help of West. And India's anti-foreign capital sentiment applies to businesses from all countries.

For the Digital India campaign, which the Modi administration launched five years ago, it also intends to foster a domestic businesses-dominated program to transform the nation into a digitally empowered society and knowledge economy.

However, rosy visions and practical capabilities are two different things; while fulfilling the campaign independently is undoubtedly out of the nation's ability, its "perfect" approach to take advantage of Western capital while deprive them from any interest is definitely unsustainable. 

Being battered by the once-in-a-century pandemic, the largest South Asian economy is now facing an unprecedented tough situation. Its efforts to decouple from China economically have already been proved futile as China again became the largest trading partner for India in 2020 despite the pandemic and New Delhi's constant obstructions.

Recently, India has shown a shred of ease on its restrictions on Chinese investment proposals due to its urgent need of foreign capital to boost its recovery from a recession, especially in the manufacturing sector. But internet industries seemingly cannot yet shun the deep-rooted economic nationalism which will not only limit the progress of its so-called Digital India campaign, but also further slow down its recovery in the post-COVID era. 

China-India economic and trade cooperation, by nature, is mutually beneficial. New Delhi is expected to genuinely reflect on its discriminatory approaches toward Chinese capitals and make concrete efforts to offer a stable and secure environment for Chinese businesses. If not, Chinese companies may need to think seriously about investing in India.

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Source of documents：Global Times, March 31


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