Time's up: TikTok to shut operations in India after permanent ban

Owned by Chinese technology giant ByteDance, TikTok will be scaling back its India operations, following the government making the seven-month-long ban permanent. 

“It is deeply regretful that after supporting our 2,000-plus employees in India for more than half a year, we have no choice but to scale back the size of our workforce. We look forward to receiving the opportunity to rela­unch TikTok and support the hundr­eds of millions of users, artists, storytellers, educators, and performers in India,” said a spokesperson for TikTok.  

According to sources, the scaling back will occur in two batches over the next few weeks. People involved in the ongoing projects will be retained until their completion. ByteDance employees also said the company had handed out appraisals and bonuses after the ban last year, and the decision to make the ban permanent was a ‘rude shock’. 

The Ministry of Electronics and Information Technology had asked for an interim ban on 59 Chinese mobile applications (apps) in June last year, including TikTok, SHAREit, UC Browser, and SHEIN, calling them a ‘security threat’. The government invoked its powers under Section 69A of the Information Technology (IT) Act and relevant provisions under IT Rules, 2009, in doing so. 

Last week, the ministry made that ban permanent. “We have worked stead­fastly to comply with the Govern­ment of India order issued on June 29, 2020. We continually strive to make our apps comply with local laws and regulations and do our best to address any concerns they have. It is, therefore, disappointing that in the ensuing seven months, despite our efforts, we have not been given a clear direction on how and when our apps could be reinstated,” the TikTok spokesperson added. 

“When the ban came into force, internet companies were an easy target for the Indian government. If the border situation had been resol­ved in one or two months, the Indian government could have allo­wed TikTok and other Chinese apps to continue operations, with a few safegua­rds, but in the past six months, there has been no improvement in the border situation,” said Santosh Pai, partner at Link Legal India Law Services. 

Last year, after tensions arose with China along the border in Eastern Ladakh, TikTok was among the top apps banned by the Indian government. “TikTok has a global and an Ind­ian problem. That TikTok is Chi­nese owned has been a problem in ma­ny countries. Eventually, to get around this issue they might sell to a US company. This might be a permanent global solution. India may then choose to review the situation. If they do not change ownership, I don’t think India will be open for TikTok,” added Pai.

TikTok has had a tumultuous couple of years in India over issues related to content and its origin. In April 2019, the Madurai Bench of the Madras Hi­gh Court prohibited the download of the app in the country, but lifted the ban three weeks later. It has also run into issues in countries like the US, Indonesia, Pakistan, and Bangladesh. 

Calling the layoffs at TikTok unfortunate, Aditya Kothari, co-founder and chief strategist, Chingari, said, “Right now, it’s a great opportunity and motivation for Indian entrepreneurs to showcase their potential and rise with a great product. Indians are capable of doing wonders. Our priority right now is the Indian market and in the near future, we will expand our footprint. We will hire some of the potential talent.”

Chingari came up as an Indian alternative to TikTok after the ban. After the ban on TikTok in June, several Indian app developers came up with alternatives to the Chinese short video app. Global players like Face­book and YouTube have also introduced short video-based products.

According to a report by RedSeer Consulting in December, users for short-form content grew from 20 million users in 2016 to 180 million in 2020 in India. “However, after the TikTok ban, the market saw a major void. Some of it was quickly filled by new domestic players. While 40 per cent of TikTok’s market has been captured by the new players, some users are still unwilling to shift for lack of quality, and lesser velocity of content creation,” it added. 

At least 100 people from TikTok, including Nikhil Gandhi, India and South Asia Head of TikTok, are now joining Glance — the world’s leading lockscreen platform owned by Benga­luru-based mobile ad network InMobi Group, according to sources.