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Indian Tech Startups Get a Boost from Centre’s Online Market Regulations

New Delhi is adopting an increasingly hard-line approach to Big Tech and their presence in Bharat’s growing online market. Regulations, blocks and censorship requests set up a complicated playing field for many offshore businesses, benefitting local tech start-ups. Experts think, however, that Centre is ultimately sending a message to the outside digital world – comply and you can stay.

Raising the Bar for Social Media and OTT

In a world increasingly influenced by social media and online service platforms, the Indian Government seems firm in its intent to have its way with Big Tech. The recently announced restrictions on social media content and Over-the-top (OTT) providers place digital giants like Twitter, Facebook and YouTube (and to an extent Netflix and Amazon) in a position to listen more carefully to what Centre has to say.

Compliance standards include more traceability for “dangerous” content, grievance redressal mechanisms and local representation, among others. But it does not stop there, as some India-based employees of important social networks were reportedly threatened with jail time for non-conformity.

The move comes in the context of an uncertainty for many important global online businesses. By banning hundreds of Chinese apps – including market leaders TikTok and WeChat – the Modi administration showed that it would not hesitate to follow through with harsher measures should its standards not be met. Despite the fact that the formal reason for the breach in tech relations with China was the 2020 border confrontation, its positive effects were felt by many homegrown desi alternatives of formerly popular apps.

Indian TikTok replacements such as MX Taka Tak and Moj are currently downloaded more than Snapchat, Facebook, Instagram and WhatsApp, as per Sensor Tower data. The nation’s answer to Twitter (named Koo) had a surge immediately after Centre’s fallout with the US microblogging platform – officially over the reluctance to remove certain accounts as per Government request, unresolved to this day. Both Koo and Chingari (another TikTok-look-alike) were among the winners of a government-backed “app innovation challenge”.

Most reputable foreign gambling platforms such as PureWin.com still offer their social networking, streaming entertainment, roulette online or OTT content without any interruption or limitation. But foreseeable difficulties to Big Tech operators in Bharat have brought immediate benefits to domestic apps that are willing to cooperate fully, share sensitive data or even censor upon Government request.

The thin lines between freedom of speech, (personal) data ownership, cryptography and consumer protection policy have put social media, especially, in a tight spot. India’s answer to Twitter, Koo, has a strikingly similar bird logo. Despite the fact that such developments were unexpectedly positive for its developers, Koo’s co-founder insists that local app developers have a much better understanding of the market and the digital culture of Indians. And that most of his colleagues have the capacity and know-how to deliver what foreign companies might overlook.

Bharat’s reported 750 million internet users are an important growth target in Big Tech expansion plans. Recent developments, however, point to local startups attempting to fill the void in an increasingly regulated internal market.

Foreign Digital Relations

Australia recently had its own tussle with Facebook and Google, while Europe and even the US have already tested the waters for better regulation of globally relevant digital technology. Breaking up and stripping down some powers from digital giants like Google, Amazon, Facebook or Netflix has never been an explicit goal of the Modi administration. India claims to be protecting its national (and digital) sovereignty and it — and it has an undeniable leverage.

By promoting a regulatory framework which indirectly favours the more obedient local tech companies, Centre encourages others either to follow suit or be seriously limited in their access to the market. More popular made-in-India apps may not have been the initial intent. But they are the apparent positive outcome of this attitude of “digital nationalism”.

India is not ready (or willing) to have a serious online market spat with the West. America’s biggest tech businesses continue investing in local solutions, and it is closely tied in industrial, military and trade agreements with Europe, Australia and the rest of Asia. The World’s largest democracy seemingly wants to send a clear message to global digital businesses – accessing its immense online market “should not be taken for granted.”

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