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GO CHINA GO

Indian startups funded by Alibaba and Tencent are backing India’s ban on Chinese apps

Boycott China
REUTERS/Amit Dave
Not easy to get rid of.
Published Last updated This article is more than 2 years old.

A number of Indian companies have been quick to applaud the government’s sudden ban on 59 Chinese apps—including startups whose growth has come with the help of funding and know-how from China’s tech giants.

Vijay Shekhar Sharma, founder and CEO of Paytm, India’s largest mobile payments platform, praised the ban on Twitter on Tuesday, calling it a “bold step in the national interest.”

“A step towards Atmanirbhar App ecosystem. Time for the best Indian entrepreneurs to come forward and build the best by Indians, for Indians!” he wrote. Atmanirbhar means “self-reliant” in Hindi.

Twitter users were quick to point out the irony in Sharma’s declaration: Paytm is backed by China’s Alibaba, whose fintech arm Ant Financial acquired a 25% stake in 2015 in the Indian startup’s parent, One97 Communications. Some posted photos of Sharma with Jack Ma, founder and former CEO of Alibaba, and Sharma in an interview with India’s Economic Times newspaper compared meetings with the Chinese entrepreneur to taking an “executive MBA.” (The article also described them as “best friends,” and likened the relationship between Alibaba and Paytm to “a military alliance.”)

Two other apps from Alibaba are caught in the ban, including UC Browser and UC News.

“I feel paytm should reduce chinese investor share & make it more non chinese. I really dont like my money going to china anymore,” a Twitter user wrote under Sharma’s post.

Paytm is far from the only Indian startup suddenly trying to prove its patriotism, and distance itself from its Chinese benefactors. Overall, Alibaba and Tencent have directed investments into almost half of India’s 31 unicorns. But ties that Indian entrepreneurs were once eager to promote are a little inconvenient now that hostility to China and Chinese products is surging in India.

India cited national security as its reason for banning the 59 apps, including TikTok, the short-video app owned by Beijing-based ByteDance that has become hugely popular among young Indians. But the abruptness of the move against platforms which government figures themselves had been using also appears to be in retaliation for deadly skirmishes between Chinese and Indian troops on the two countries’ disputed Himalayan border. India has since seen widespread calls on social media to boycott Chinese smartphones and apps, and has placed new restrictions on Chinese investment—a move that could hurt India’s startups dearly.

Ravish Naresh, co-founder and CEO of  digital ledger app Khatabook that helps small businesses track their transactions, also lauded the ban on Twitter, urging Indian startups to “fill all the big white spaces” created by the lack of Chinese competition. The app received $25 million in series A funding last year from investors that included social media giant Tencent, parent of the now banned WeChat  last year.

Another China-funded business, ShareChat, India’s rival to WhatsApp, also showed support for the ban. “This is a welcome move from the government against platforms that have had serious privacy, cyber security and national security risks. We expect the government to continue their support for the Indian startup ecosystem,” said Berges Malu, director of public policy at the company, according to Indian business news outlet Livemint.

The social media app counts Chinese smartphone maker Xiaomi and Chinese VC fund Shunwei Capital as investors. Xiaomi’s Mi Community and Mi Video Call apps are now banned in India, while the smartphone maker has reportedly also tried to distance itself from its Chinese roots by putting up “Made in India” banners on its outlets.

Patym, Khatabook, and ShareChat didn’t immediately respond to questions from Quartz.

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