Following an intense tussle between the two armies at the Sino-Indian border, India’s government announced an absolute ban on 59 Chinese apps in light of defending the nation’s integrity and sovereignty under Section 69A of the Information Technology Act, thereby imposing a geo-block. Discontented with the sanction, Chinese officials called this a “discriminatory and selective” step, going against the general trend of international trade and also violative of the World Trade Organisation Rules.
Based on the press release, it seems that China has accused India of violating the Principle of National Treatment under international law, which refers to the treatment of foreigners at the same degree as one’s own citizens. The maxim has been accorded in trade law under the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services. Since technology has advanced profoundly from the time when the two agreements were incorporated, the framers could not include any provisions for computer softwares. Thus, challenge is whether to classify mobile applications as goods or as services. For instance, the application Shein involves the movements of goods, thus it shall fall under the garb of GATT, whereas applications such as UC Browser and CamScanner are deemed under GATS. Due to this uncertainty, the purview of both the agreements needs to be verified.
Considering applications which serve as products, Article III of GATT shall come into question. The law prohibits member states from applying internal laws and regulations that affect the flow imported products within their territories. However, the said clause is applicable only when a state discriminates foreign products as a way to “afford protection to domestic production”. But in the present case, India did not block Chinese goods from entering its market to promote its domestic goods, but only to protect its national integrity. No nation wants to maintain trade relations with another which repeatedly threatens its sovereignty. Thus, India’s move was simply a method to discourage the use of Chinese products as a trade sanction, condemning the uncalled violence at the border. In addition, India shall also remain protected by Article XXI of the agreement, which allows Members to breach WTO obligations in order to protect their national security; allowing them to act in accordance with situations of war or emergency in international relations. The Organization also delivered a panel report in the Russia – Measures Concerning Traffic in Transit dispute, interpreting Article XXI as to provide a degree of freedom to states, so that they themselves determine the necessity to restrict trade with an aggressor state. Given that the brawls between the two armies were severe enough to be described as the worst clash in decades, the situation could escalate into a war anytime, meaning India acted within the scope of the law.
Rather, there exists a possibility for a counter-suit. Since China has always restricted foreign applications such as Facebook, Instagram and Twitter from penetrating its markets under various pretexts and has instead given rise to several homegrown versions of such platforms, with disguised backing from its own government. While accusing India of disobeying the general trend of international trade, China itself has been indulging in unfair and illegal trade practices by routing its goods to India via third-parties like Singapore and Hong Kong, who already have preferential trade agreements with India. As per a WTO Report titled “Other Barriers to Trade”, such activities of indirect-dumping through a third country are prohibited, thus holding such malpractices punishable under international trade law.
Likewise, Article XIV serves as an exception to the National Treatment clause under Article XVII of GATS, thereby empowering states to act in furtherance to any threats to their sovereignty, which they may identify themselves, hence rendering the sovereign prerogative ultra vires the jurisdiction of WTO.
The two countries also have a bilateral treaty for the promotion and protection of investments since 2007, Article 3(2) of which casts a duty upon states “to accord fair and equitable treatment (FET) to the investments and returns of investors of each contracting party at all times in the territory of the other Contracting Party.” FET clauses are incorporated to serve as a barrier to protect foreign investors from unjust treatment by host states, thereby enabling them to operate unreservedly. But as discussed in the matter Saluka Investments BV v. The Czech Republic, states are free to violate such clauses in light of public interest. Conversely, Article 14 of the treaty consists of an “essential security interests” clause, which allows states to safeguard their security, even by violating the fair and equitable treatment clause.
Lastly, FET clauses are not absolute in nature, but are largely dependent on the conduct of the investor’s state. China has been accused of spreading propaganda throughout the world with its application TikTok, which even led to its ban in 2019 by the Madras High Court. Also aggrieved by China’s behaviour, countries like the US and Japan are also in preparations to ban several of its applications from their markets.
Therefore, China’s accusations stand to be hollow, since India remains protected by the exception to protect national integrity, as provided under both GATT as well as GATS. Considering its past deeds, it is highly unlikely for China to receive any reparations from India.