Chinese digital investments a data security risk, says Gateway House

A top foreign policy think tank in the country has raised ‘data security’ concerns about China-linked investments in India’s digital sector. A report by ‘Gateway House: Indian Council on Global Relations’ says that Chinese linked companies have penetrated deeply into India’s digital echo system and even with small investments they can influence the Indian masses.

“Chinese apps in India ask for 45 per cent more permissions than the number of permissions requested by the top 50 global apps,” the report said citing a study. “Chinese apps represent a challenge to Indian user’s data security as they require vast amounts of personal data; this is usually a bare minimum to provide users access to their interface,” the report said.

The board members of Gateway House include prominent personalities like Neelam Deo the former Indian Ambassador to Denmark and consul general in New York, Ishat Hussain former board member of Tata Sons and Amay Hattangadi of Morgan Stanley Investment Management, among others.

“At least six of the 10 most popular Chinese apps ask users to provide unnecessary access to camera and microphones on their smartphones. Such apps collect large amounts of personal data from users such as location, profession, friend lists, friends’ interests, cellphone number and photo interest as a bare minimum, thereby stoking privacy concerns in app users. Deactivation of a user’s account does not result in data being returned to the user or it being deleted from the app’s server. In fact, these details are often shared with third parties, the report said.

The think tank says that Chinese investments in India need to be viewed with caution, considering the increased penetration of smartphones and apps, like TikTok, especially in Tier-II and Tier-III cities, such as Guwahati and Raipur. The potential to influence Indian minds is massive. By 2024, India’s smartphone users are expected to double to 1.25 billion from 610 million in 2018-19. Chinese smartphone manufacturers in India already have a 66 per cent share of the smartphone market as of the first quarter of 2019, the study shows.

According to the report, the Ministry of Electronics and Information Technology had sent notices to TikTok, Bytedance and Helo apps, seeking a response to its data privacy concerns about these apps being used to commit unlawful activities, such as storing users’ data and creating a hub for anti-national activities, such as communal disharmony.

“India’s regulatory authorities need to frame policies with an understanding of the immediate security, technological and geoeconomic aspects to China’s expansion. It’s time for India to broaden the government’s powers to block deals that threaten national integration, sectarian harmony, border security, and cyber security and effectively deal with the looming challenge posed by Chinese tech companies,” report said.

The report also advocates of adopting measures against Chinese companies like the European Union recently did.

“EU measure makes provisions for dominant characteristics of China’s investment strategy: a focus on technology and infrastructure sectors, state-linked and funded entities and state-led outward projects. The EU’s new screening mechanism also targets a specific aspect of some Chinese deals: many are executed via third parties in other states to conceal the Chinese source of ownership and funding. The EU measure explicitly prevents such bypassing of national screening by investigating deals within the EU that are associated with Chinese firms. Adopting similar screening for the IT-BPO industry in India will protect citizens’ sensitive personal information from being shared through apps, browsers, search services and other critical technology and infrastructure,” the report said.


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