The Winners and Losers of the Indian TikTok Ban

Well before Donald Trump demanded that the US operation of Tiktok needed to be sold to a US company to avoid a complete shutdown of the app, India had already banned the social media product in its own country. India, similar to the claims made by President Trump, believe that Tiktok created national security issues and needed to be reigned in immediately. The real issue was the Indian government did not want the Chinese government to influence more than 600-million people.

How Did it Start?

On June 29th, the Indian government announced the banning of TikTok and 59 other Chinese apps, which was to go into effect on June 30, 2020. TikTok itself would bear the brunt of the loss of India’s 611 million users, who make up about 30% of their accounts. The economic result if this remains in place would be devastating. Tiktok could lose up to $6 billion in revenue.

Indian and China are in a Turf War

The reasons given for the ban on the popular social media app were because of national security concerns. A more likely scenario is that Indian and Chinese troops continue to have a turf battle along their disputed border. The deadly tensions erupted in June between the world’s two most populous countries which happen to coincide with the banning of TikTok. India claims that the Chinese army violated previous consensus land and carried out provocative military actions in the disputed area. It appears that Chinese troops earlier in June landed in what has been considered Indian territory which India saw as an aggressive act. Unfortunately, the move by the Chinese provoked a rapid buildup of troops on each side.

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According to the Indian government, the decision to ban TikTok was purely due to security concerns and had nothing to do with the simultaneous turf battle that was going on between the two countries in the disputed area of the Himalayan region of Ladakh.

The Loss of TikTok Hits the Indian Working Class

TikTok required minimal effort to set-up and very little to no equipment to use and create videos. This allowed Indians from every area to use it with few barriers. It provided an outlet for the poor and created a class of influencers that appeared to both the you-tube influencers in India who were losing followers to TikTok. What became clear was a social dived between TikTok influencers who now had some recognition and Youtube influencers who wanted TikTok to go away.

The Timing Could Not Have Been Worse

The timing of the ban created a gap in entertainment that allowed people to feel comfortable with some of the travel restrictions imposed to help reign in the spread of COVID-19. In August, India became the fastest-growing coronavirus caseload of any country in the world, reporting more than 75,000 new infections per day. Crowded cities with people that had extraordinarily little to do and plenty of “shelter in place” fatigue increased the spread of the virus. The lack of contact tracing and nearly 1.3-billion people generated a surge in the number of new COVID cases. With economic contraction spreading throughout India, states are desperate to get people back to work which is increasing the spread of the virus.

Who are the Biggest Losers?

Unfortunately, the upshot is that the biggest losers are the Indian people who use TikTok. The social media giant had a stronghold in Indian allowing many of the downtrodden to have access to a platform during a very difficult time across the globe. During a time when Indian’s were asked to stay at home and avoid going into public places, the popular social media app allowed Indians of all classes to dance and lip-sync while watching one another. As soon as the government pulled the plug on the app it immediately disappeared from the Apple app store and Google app store, eliminated access to the app, and any prior videos that were stored on the app.

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The Bottom Line

What seems to be the key underlying issue for the Indian government was that TikTok was allowing the Chinese government to attain cultural influence over Indians. While TikTok was banned another app owned by ByteDance, called Resso is allowed in India. This app is becoming very popular and flies in the face of the protectionist argument made by the Indian government. India is keeping out Instagram’s new Reels feature, which is a TikTok clone, which could have U.S. influence. The Reels social media app is rapidly gaining fans as Instagram and Facebook are widely used in India. While TikTok is a private company, its U.S. operation could be part of a public company very soon. Facebook Share trading of has reached all-time highs as Reels has started to gain traction and is becoming a popular alternative to TikTok in a location where the popular social media app has been banned.

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