Geetha Sridhar and her daughter Sarada used to post videos on TikTok before the Indian government banned dozens of Chinese apps © Reuters

Soon after India announced it was banning 59 popular Chinese mobile phone apps, a local venture capitalist noticed a sharp rise in traffic to a number of Indian alternatives he had backed. “I never before realised the extent to which big tech stifles innovation and young start-ups,” he said.

This was not a criticism of China in particular — businesses like Beijing-based ByteDance, with its ability to personalise content and its $100bn plus valuation, are emblematic of the power of big tech the world over.

Nor was it a rant against foreign versus local companies, or a plea for protectionism. Instead, this Delhi-based investor is concerned about the fact that increasingly “the game is rigged. And that changes the future trajectory of an economy”.

To be sure, among the biggest beneficiaries of the ban have been Indian equivalents that compete with TikTok, the wildly popular short-video app owned by ByteDance that had about 270m viewers in India.

These include Glance, which describes itself as the largest “made in India” content platform. A presentation describes its mission as “taking on the big giants from the US and China”. The screen for its news stream shows prime minister Narendra Modi and Donald Trump embracing during the US president’s visit to India in February.

Naveen Tewari, who owns Glance, said the company reached 100m daily active users in “probably the fastest ever” time after the ban was announced. Other investors describe user numbers that went from a few 100,000 to tens of millions in 48 hours for some apps, thanks to the sudden void left by the departure of TikTok and other Chinese competitors.

In any case, the Indian experiment is being watched by entrepreneurs and investors everywhere for clues to the future both locally and further afield at a time when the influence of tech is accelerating everywhere.

Because tech is often all about network effects — the Facebooks and WeChats of this world become more powerful and popular the more users they have — its power tends to be self-reinforcing.

Market share is everything and after a certain point, the bar to entry can rise very quickly. Tech companies may not set out to kill potential competition, but the effect of these characteristics is that others find it increasingly difficult to catch up.

But some say that scale matters less than the ability to innovate.

That is certainly how the situation has played out for some new entrants in China. A few years ago, it would have been impossible to predict that ecommerce site Pinduoduo would win market share from Alibaba, or that ByteDance would take eyeballs away from Tencent’s WeChat messaging and ecommerce app.

One potential danger is that investors and policymakers draw the wrong conclusions from a comparison of China and India. Outsiders see China as a closed market and wrongfully assume that it isn’t competitive. But one Singapore-based venture investor said this misses an important point. “Because China is closed, it is easier for a start-up to capture value and get to scale,” he said.

India, by contrast, is seen as much more open to outsiders: the likes of Amazon and Facebook are widely used, making it hard for newcomers to gain a foothold. That in turn can lead to protectionist policies, motivated by a mix of geopolitics and the influence of local vested interests.

There is no such thing as an ideal policy on local vs international and big vs small; all involve trade-offs. Is it better to have a more rough and ready local payments app than the elegant simplicity of the WhatsApp pay app that Facebook has been trialling in India ahead of a full launch? And what does local mean anyway?

India continues to lack national champions in many areas such as data analytics and biotech. Does the banning of Chinese capital and business models facilitate their emergence or doom the country to a second-rate tech sector? Self-reliance is not a panacea.

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