Crackdown in China, hope in India

Synopsis: China’s sweeping overhaul of its tech sector could benefit India in the near future.


Last year China stopped Ant Group’s Initial Public Offering (IPO), which is Alibaba’s fintech arm. Recently, there is another high-profile crackdown on a Chinese tech company.

China has also imposed various regulations, antitrust and anti-monopoly lawsuits, cyber security probes, and algorithm controls on the entire tech segment, ranging from e-commerce websites, food delivery apps to e-learning portals. These restrictions are estimated to have wiped off over $1.5 trillion of value from Chinese tech stocks.

What is the China motive behind that?

China wants to ensure that no private company or competitive country should gain enough data that will impose challenges to Chinese Communist Party-led state dominance.

Also, China restricted the rules only to the commercial tech sector. State-supported those sectors which perceived to be of higher value like 5G/6G, semiconductor chips, artificial intelligence, biotechnologies, batteries, aviation and space tech. They want to maximize China’s geopolitical and geo-economic gains.

How these Chinese restrictions will benefit India?

The rate of digitization has accelerated during the pandemic in India. Start-ups in India raised a record $10.46 billion in the first half of this year alone. India’s tally of unicorns has crossed 60. This projected growth image will attract the companies fleeing from China because of their strict regulations.

Read more: 1,600 new tech start-ups and 12 unicorns in 2020: Nasscom’s Indian Tech Start-up Ecosystem report 
What should India do?

India, while enhancing its internal capacity should also collaborate parallel with other friendly nations. The ongoing talks with Taiwan to bring in a semiconductor chip manufacturing plant to India is a step toward this direction. If successful, this could drive next-generation industries, including 5G devices and electric vehicle.

Read more: Hello Taiwan: New Delhi should boost ties with Taipei not just because of Chinese threat. There are other benefits

India’s first success in sectors like biotech and space shows that with concerted efforts in manufacturing. So, similar concerted efforts to develop indigenous manufacturing and hard technology are vital if India is to retain its strategic autonomy.

Source: This post is based on the article “Crackdown in China, hope in India” published in The Hindu on 6th October 2021.

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