On Tuesday Feb. 15, Indian government sources said it had blocked access to 54 mobile apps with apparent links to China due to national security concerns, including Tencent’s Xriver, NetEase’s Onmyoji Arena, Astracraft, and Free Fire of Sea Ltd’s mobile game.
Reuters reported that “Free Fire” is on India’s list of prohibited apps. Sea’s U.S.-listed shares fell 18.4 percent on Monday. More than 16 billion dollars reduced the stock’s market value due to the sell-off.
According to Bloomberg, Sea was developed in Singapore by Chinese immigrants. Tencent, the company’s primary stakeholder, initially backed Sea with a 21.3 percent stake, then reduced to 18.7 percent on January 4th.
Due to rising geopolitical tensions, the world’s second-largest internet market blocked around 300 Chinese-linked websites, including TikTok, Alibaba’s UC Browser, and Tencent’s WeChat, in late June 2020.
An anonymous government source told Reuters India that customer data was being transmitted to servers in China via the apps. Such data might be mined, gathered, processed, and profiled by “elements hostile to the sovereignty and integrity of India and for activities detrimental to national security.”
TechCrunch reported that several other companies and app developers have attempted to resolve New Delhi’s concerns. Still, the Indian government upheld its decision early last year after judging the replies as unacceptable.
As India refused to lift its ban on TikTok, ByteDance (the app’s parent company) fired off the vast majority of its employees in India and recently shut down its educational technology subsidiary.
LightStream Research analyst Oshadhi Kumarasiri, who publishes on Smartkarma research platform, said that the “Free Fire” prohibition could cost between 78 million dollars and 104 million dollars every quarter in income. It was difficult to rule out the prospect of a Shopee ban.
Traders in India have already called for a boycott of Shopee, accusing it of actions that harm offline retailers.