In considering the implications of the announcement last week that Facebook will invest ₹43,574 crore for a 9.99 per cent stake in Jio, it is important not to lose sight of the dragon in the room.
The partnership between two of the most iconic symbols of entrepreneurship in the world’s largest democracies makes more than just business sense—its strategic value will not be lost on those at the highest levels of government for whom India’s security is the top priority.
Particularly now, when, as a result of the coronavirus pandemic which originated in China, world powers are beginning to reassess their relationship with the Middle Kingdom.
India, for whom China is an immediate neighbour with a long and disputed border, managing the relationship has been a tricky balancing act. India has expanded the trade and economic relationship significantly in the hope that the renminbi and the rupee will provide the glue that binds.
While India’s motives have been good, the outcomes have been far from satisfactory - China takes way more than it gives, continues to act against Indian interests (especially in relation to Pakistan) and mistrust continues as before.
The trade deficit with China in 2019 was nearly $57 billion, while Indian companies exported items worth less than $18 billion. India’s top software companies have continued to complain of market-access issues in China, which is adept at erecting non-tariff barriers.
On the other hand, Chinese companies, especially in digital, have the run of the place in India. PUBG, a gaming app owned by Tencent, is among the highest-grossing apps in the country. TikTok is among the most downloaded. Helo, Clash of Clans, UC Browser, ShareIt, you-name-it all fly the red-and-yellow flag.
Meanwhile the likes of TCS, Infosys and Wipro are crying their throats hoarse about market access problems in China. Ditto the pharmaceutical companies or exporters of agri products. Registering a business can take years, and inspections are expensive and onerous.
State-owned companies are preferred and the system is non-transparent and complicated. When the Chinese do business, you can never be clear where business ends and politics begins and how much of business is cover for espionage.
It is the habit of obfuscation and hyper-nationalism that has caused the world to react with horror to the manner in which China has handled the coronavirus crisis. It has sought to blame other countries for its acts of omission and commission and is adding insult to injury by seeking to buy up quality assets whose prices have been beaten down because of a virus incubated in China.
As the world reassesses its relationship with an undemocratic country which has been inimical to India since independence, we should carefully consider the impact of Chinese presence in areas vital to our national interest. Sectors such as telecommunications, social media, payments and indeed all digital interactions—areas in which Jio specialises - are not just engines of commerce.
They are intimately bound up with national security—to listen to what Indians are saying to each other and to have the power to manipulate our online interactions is not a power that the Chinese should have over us. We definitely have no such privileges in China.
Jio, which has demonstrated a master-class in building a world-class digital platform, is a symbol of Indian ingenuity. It is a true-blue example of home-grown entrepreneurship, acquiring nearly 400 million users in 42 months and unleashing a data revolution in India. Just as Jio is an Indian mascot, so Facebook, the world’s largest social network, is an American icon.
A partnership between Jio and Facebook, with Facebook as the minority investor, is just the type of collaboration that India needs as a democratic alternative to the threat of a Chinese-dominated digital and social media landscape. Jio will innovate for India and play by Indian rules. There will be no secrecy or subterfuge or threat to national security.
As it is, Chinese-owned companies, through their operations in India, know far too much about India for our comfort. Just as India and America have been described as natural allies, the same is true of Jio and Facebook. From ecommerce to payments and gaming to digital currency, the sky is the limit for the partnership and the Indian consumer. Unlike Chinese self-aggrandisement, the partnership is also a true reflection of Indian ethos: Jio aur Jeene Do.
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