I wrote this paper for the Friedrich Naumann Foundation on the steps that India has taken for its technology decoupling from China, covering changes in the regulation of investments, telecommunications, ecommerce, handsets, as well as the ban on apps including TikTok. This includes recommendations related to what countries can do to reduce their dependence on China. Executive Summary:
Over the past few years, India has taken decisive steps to reduce its dependence on Chinese technology and investments. This was triggered by border skirmishes with China in 2020, but built on long- standing national security concerns about China, given the history of conflict between the two countries.
India has banned hundreds of Chinese apps like TikTok and UC Browser, imposed measures to reduce Chinese imports, restricted Chinese investments in Indian companies, and mandated telecom infrastructure be from “trusted sources”, and tried to reduce the import of products from China. These actions have come along with active support and development of regulations in favour of domestic companies and innovation, a push for manufacturing in India, and global alliances to ensure that China doesn’t dominate emerging technologies. Not all of these moves have been successful: it hasn’t been able to address its trade gap with China, Chinese technology is still implemented in Indian telecom networks, and Indian alternatives to Chinese applications haven’t really succeeded to replace TikTok.
India has, however, been opportunistic, and demonstrated agility in leveraging geopolitical developments to further its goals: there is a clear sense of direction in its approach. Its actions underscore striking a balance between economic gains and strategic interests.
Thus far, the anti-China measures instituted by the Indian government haven’t gravely harmed India. They have benefitted a few Indian companies, and American companies even more so. The impact on trade has been minimal so far. It’s, however, probably still too early to understand the full impact of these policies as the efforts are part of a long-term approach, but an approach that so far looks promising.
While, to some, India’s approach to tech emancipation from China might appear illiberal, it’s also important that openness should not be a vulnerability. India’s technology derisking from China holds key lessons like assessing dependence risks, building domestic capabilities, opportunism in policymaking, fostering international alliances, and supporting a domestic technology ecosystem.