China already frequently bans non-local apps, don't they? So I'm not sure what recourse they have other than escalating this to a real trade war instead of a digital trade war.
This is in response to Chinese incursion into disputed territory that has left soldiers on both sides dead.
Talking heads in India say these measures are Sun-Tsu like and mesmerized the enemy —Obviously the talking heads are propagandists, but on the other hand this is about the skirmishes on the Himalayas.
India heavily depends on software consulting and BPO exports for its foreign currency (over 100 billion usd per year).
If China really wants to retaliate, it can sanction the WITCH companies and force any multinational who wants to be in China to not use them. This will also benefit competitors in other developing countries like Phillipines or Pakistan.
India is playing with fire here. Especially dropping out of RCEP, the risk being encircled economically.
TikTok/PUBG are "bannable" items; banning physical items that people need/use daily, most of which are made in china, will majorly backfire. The average voter doesn't care enough about these apps to raise a stink.
My take is that these markets can only take on China when the Chinese software is the significant player in the market, while they are non-essential for the fundamental functionality of a society. On the other hand, there are barely any significant Indian software on the Chinese market, while lots of American software provide non-replicable (at least not immediately) functionality (e.g. MatLab / Microsoft Office / Windows).
They could retaliate by preventing foreigners from outright owning businesses in China, or encroach on one of their bordering neighbors, or steal some IP.
I can't imagine this goes on and continues escalating long before China reacts strongly.
What is China's response going to look like? I feel uneasy that their response is going to light the fire even more.