Is It Google Vs Paytm Or US Vs China? India Must Own Big Tech And Not Just Be A Battleground For Them
India’s tech growth must be India-powered, not controlled by the US or China.
Sooner or later, India will have to face this question: will it enable the creation of its own tech giants, or it will merely settle for regulating the big global tech giants, whether from the US or China, and ultimately allow them to control India’s tech destiny.
Big money has poured into India’s tech startups and even biggies, from Reliance Jio to Paytm to Big Basket and Flipkart. With the solitary exception of Jio, which has obtained big investments from Facebook and Google on its own terms and without ceding control, most other startups are beholden to global giants.
This matter came to a head recently when Google arbitrarily decided to drop Paytm temporarily from its app stores, allegedly for violating its anti-gambling rules, forcing Paytm to breathe fire and fury against Google.
That scrap (among other things) has led Paytm to launch its own mini app store, with customers such as Decathlon, Ola, Rapido, Netmeds, 1mg, Domino’s, NoBroker.com and FreshMenu already on board. More could join since the terms are vastly better than what the Google app store offers.
This has forced Google to delay charging a fee of 30 per cent for in-app sales routed through its Android apps to April 2022.
But this merely raises another question: if Paytm is taking on Google, is this really about a popular Indian app taking on the giants or a China versus US tech battle fought through proxies?
It is worth recalling that Paytm is more than 25 per cent owned by Alibaba and some of its affiliates. Even though CEO Vijay Shekhar Sharma has welcomed the Indian government ban on Chinese apps like TikTok after Chinese troops made incursions in Ladakh, it does not take away the reality that a Chinese company is an influential voice on the board of Paytm. This holds equally true for other Chinese investments in Indian e-commerce companies like Big Basket.
At a valuation of over $16 billion, the Alibaba group stake in Paytm is worth over $4 billion already. That’s Rs 30,000 crore, and not easy for anyone but the richest foreign venture capitalists to buy off.
After the scrap between Paytm and Google, Communications Minister Ravi Shankar Prasad indicated that India was open to launching its own app store, but it is one thing to tweet about it, quite another to develop a robust app store that will challenge rivals like Google and Apple. Currently, though government apps can be downloaded directly from their own websites (Umang, Bhim, DigiLocker and Arogya Setu), these apps tend to be downloaded more from the app stores of Google and Apple.
There is only one sensible way for the Indian government to counter the power of the Google and Apple app stores, and that is not by trying to make its own app store. Governments are never good in business, but they can enable them enormously.
It would be better for government or public sector entities to take small stakes in any large player who wants to build his own independent app store. It could also be a group of techies.
It can then encourage all government departments, public sector units, and other private players to take a stake in this app store, apart from using them for their own apps. It may also make sense for government to take small stakes in multiple app stores, so that it does not put all eggs in one basket.
At least one should produce a winner. The money it has set up for promoting startups should go here, and not in any specific commercial venture.
A public-private partnership is called for to create a resilient and agile India-owned webstore funded by government, private industry, and national institutions like the National Stock Exchange, some big banks (not more than Rs 40-50 crore each), with tech wizards being given Esops for developing it.
And yes, buying the Chinese out of Paytm – India’s most successful digital payments app – would be a good start. Its easier done in India than in the US, where TikTok can use the courts to thwart Donald Trump’s efforts to shift ownership of ByteDance away from Chinese control.
To be a tech super power, India must be able to control the environment in which domestic tech platforms prosper and create huge opportunities for growth. India’s tech growth must be India-powered, not controlled by the US or China.
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