Amid Doklam Standoff, Govt Asks Chinese Phone Makers to Set Up Servers in India

Chinese handset makers make up more than half of India’s $10 billion smartphone market.


Amid rising tensions with Beijing over the Doklam standoff, the Indian government has asked 21 foreign handset makers — mostly from China — to detail the procedures and processes adopted by them to ensure security and privacy of their users’ data by August 28. It has asked the foreign handset makers to set up servers in India to ensure user data protection, especially since most Chinese smartphone makers have their servers in their own country.

Chinese handset makers, such as Xiaomi, Oppo, Vivo, Lenovo and Gionee, make up more than half of India’s $10 billion smartphone market. Most of these companies have their servers in China, except Xiaomi, whose VP and India’s MD Manu Kumar Jain was quoted in India Today report as saying, “All our data is sitting in Singapore and the United States on AWS servers, so there is no concern.”

Concern Behind Handsets

“The biggest privacy risk that you have is your smartphone,” Nandan Nilekani, Infosys co-founder and former Unique Identification Authority of India (UIDAI) chairman, said to Mint. “A billion people will have smartphones as we go forward, their conversations will be recorded, their messages will be read, their location can be identified with the GPS or the triangulation of the towers on a real-time basis,” Nilekani added, pointing out how a person’s location is known for 24 hours a day.

“Using all the accelerometers and gyrometers on the phone, you can actually make out if someone is drunk or not. The kind of intrusion of privacy that the smartphone does is order of magnitudes higher than an Aadhaar card,” he said.

The government’s recent directive is a part of a wider move to prevent crippling cyberattacks that could be launched on the country’s telecom and power transmission sectors, Economic Times reported. With tension at the border and growing imports of IT and telecom products from China, the directive stems from the concern that smartphones could allow backdoor access to critical information.

Security of Servers

“If the government finds any malicious activity from the information provided by handset makers, it may give them time to ensure security, by setting up servers in India,” Jaipal Singh, senior analyst at IDC India, was quoted as saying by ET. “The Indian government has rules for banking, financial services and even telecom, where user data has to stay in the country,” he added.

According to a  recent Confederation of Indian Industry (CII) study, Chinese investment in India’s electronics and information technology products sector is worth nearly $22 billion.

This is not the first time India has asked foreign companies to get local servers to address security concerns. In 2008,  the telecom department had asked Canadian smartphone maker Blackberry to shift its servers, a directive the company complied with by setting up a server in Mumbai in 2012.

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