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May 14, 2025By ePlane AI
Geopolitical Standoff Impacts Tech Sectors
The Conflict and Its Impact on Tech Companies
India and China’s fast-growing tech sectors have been caught in the crossfire of an intense geopolitical standoff this year. While both will suffer from the showdown, Chinese tech companies have more to lose. Tensions between the two countries have been rising since June, when they engaged in their worst conflict in decades: a bloody clash along a disputed border in the Himalayas that left at least 20 Indian soldiers dead. In the following weeks and months, Indian officials banned apps from Chinese tech giants Bytedance, Alibaba (BABA) and Tencent (TCEHY), and reportedly restricted embattled telecommunications equipment maker Huawei from participating in India’s 5G network. Both countries agreed to deescalate military tensions in September, but that hasn’t brought much relief for businesses caught in the dispute.
ByteDance’s marquee international app, the short-form video platform TikTok, is still banned in India. And last month, the Indian government banned dozens more Chinese apps, citing national security concerns. The pressures are a problem for companies based in both countries, but the pain is particularly acute for Chinese companies trying to grab a piece of India’s explosive internet growth.
Internet Growth and Market Potential in India
India is now home to nearly 750 million internet users, more than double the number in 2016, according to the latest government data. Atlas VPN, a market research firm, estimates India will have 1 billion internet users by 2025. Locked out of that market, Chinese companies “stand to lose riding the ascent of possibly the world’s third-largest economy by 2050 and the market with the world’s second-largest internet users,” said Shirley Yu, visiting fellow at the London School of Economics and founder of a company that assesses strategy, business, and political risk for companies working in China.
Consequences for Chinese Tech Companies
Several Chinese tech companies are already feeling the loss. ByteDance’s TikTok lost 200 million Indian users when it was banned in late June. That’s twice as many users as the app has in the United States. The Beijing-based company hadn’t yet made money on TikTok in India, according to Greg Paull, principal at market research firm R3. But the company had spent heavily on establishing and expanding its slice of the market. “And now they can only watch the local, copy version apps taking over their users and do nothing,” said Paull.
ByteDance and other tech companies also need a lot of data to build better products. India’s internet users are demographically diverse and speak many different languages, making the country’s data highly prized, according to Gateway House, an Indian foreign policy think tank.
The Importance of Data for Tech Innovations
Google CEO Sundar Pichai said in a blog post earlier this year that the company’s efforts in India “have deepened our understanding of how technology can be helpful to all different types of people.” “Building products for India first has helped us build better products for users everywhere,” he wrote. For internet applications developed by Google and other tech companies, data is like oxygen, said Gateway House director and board member Blaise Fernandes. Apps need a lot of up-to-date data.

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