Can the world’s two largest democracies unite to counter China’s territorial aggression and strategic ambitions in cyberspace? This question ought to be front and center for policymakers in Washington in the wake of India’s sweeping ban on 59 Chinese apps and its escalating economic campaign against Beijing.
The app ban, which comes in response to China’s recent incursions in Ladakh, has drawn comparisons in India to a “digital airstrike” and won praise from local TV pundits and politicians alike. But analysts who have studied the ban and its immediate impact on Chinese companies believe it may have more bark than bite.
Though India’s app ban will weigh on the long-term market share of Chinese companies, it imposes only minimal revenue losses in the short-term — potentially depriving TikTok owner ByteDance of just $5.8 million in annual revenue on global revenues that touched $17 billion in 2019. Moreover, the ban does little to reverse China’s dominance in core segments of India’s digital ecosystem, such as smartphones, where Chinese brands Xiaomi, Oppo, Vivo, OnePlus, and RealMe collectively hold 80 percent market share.
The hard truth is that even with India’s newfound vigor to tame the digital dragon, countering Chinese economic influence at home is a quest rife with challenges. And like any quest, it is one best pursued together with trusted partners.
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Launching a digital airlift
Herein lies the opportunity for the United States. Can Washington now move with speed and strategic vision to support India in its time of crisis and bolster its digital counteroffensive against Beijing? Just as President John F. Kennedy dispatched planes to aid and supply India in the 1962 Sino-Indian war, the time has come for the United States to conduct a “digital airlift” that prioritises three goals.
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Goal 1: Raising immediate economic costs on Beijing
A US digital airlift should aim to add extra oomph to India’s counterpunches and thereby raise the immediate costs of Chinese territorial aggression. Here, India’s app ban can serve as a potential starting point. Washington can crack down on — and encourage partners and allies to curtail — the same Chinese apps cited by India on shared national security grounds. More importantly, it can work with allies and partners to widen the aperture of exclusion beyond consumer-facing apps and across various links in the digital value chain.
Such efforts would build upon the Trump administration’s long-running campaign to block Huawei from 5G networks worldwide. But rather than rely on the same pressure tactics, Washington should work to create a political context and narrative that empowers India and other allies to act against Huawei and ZTE on their own accord and in defence of their own sovereign interest. Recent efforts by the FCC to designate Huawei and ZTE as “national security threats” are welcome moves that carry weight in Delhi.
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Goal 2: Enhance India’s cyberdefence capabilities
India’s digital counteroffensive is likely to provoke Chinese retaliation in the days ahead, especially if Delhi succeeds in rallying the United States and its partners to join in on app bans. And as Australia has seen in recent weeks, Beijing is more than willing to employ cyber capabilities to project coercive power and advance geopolitical objectives. Accordingly, the second goal of a US digital airlift must be to enhance India’s cyberdefence capabilities.
Washington should ensure cybersecurity specialists at the senior and working levels are in regular contact with Indian counterparts, sharing best practices to defend against Chinese cyberattacks. Regular coordination and intelligence sharing could potentially allow the United States to launch coordinated cyber counterpunches when India faces cyberattacks from Beijing, providing added digital firepower to India instead of vague promises of troop deployments. Plugging up vulnerabilities in the private sector will also be critical, and both sides should use the upcoming US-India ICT Dialogue expected to take place in September to discuss short-term risk mitigation strategies with leading private sector players.
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Goal 3: Accelerate India’s growth as an ICT manufacturing hub
US industry can serve as a tremendous asset to Washington and New Delhi as both look to impose medium-term economic costs on China and restore dynamism to India’s economy. A clear opportunity lies in the ICT manufacturing sector, where India is actively courting investment from multinationals that are eager to de-leverage supply chains from China in the post-COVID-19 environment. Thus, the third goal of a US digital airlift should aim to accelerate India’s growth as an electronics manufacturing hub.
This will require a future Trump or Biden administration to take an enlightened approach to digital cooperation and trade relations with India. Instead of criticising US companies for shifting production from China to India and demanding they reshore jobs solely to the United States, Washington should tacitly encourage companies to Make in India and boost local value creation and exports. In a similar vein, the White House should also refrain from imposing retaliatory tariffs on Indian ICT exports if upcoming Section 301 consultations and long-running trade talks break down. These measures do not require the United States to set aside American interests and bilateral trade concerns. They do, however, require the United States to align its trade policy around a strategic vision instead of a short-sighted fixation on deficit reduction.
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Seizing a golden opportunity
Chinese aggression in the Himalayas has exposed the widening power differential between Delhi and Beijing and lent new urgency and importance to efforts that deepen the US-India partnership. It is vital that Washington does not miss its moment to cement ties with Delhi nor squander a golden opportunity to amplify pressure on Beijing. A digital airlift offers Washington a path to do both in one stroke using modern tools of statecraft, not boots on the ground. It is a worthwhile endeavor for the Trump administration to pursue and one that the next occupant of the White House should carry forward beyond 2020.
Anand Raghuraman @ AKRaghuraman is a senior associate at The Asia Group. Views are personal.
The article was first published on the Observer Research Foundation website.