Hey folks, Pratham here.

Welcome to Paradox Weekly, a Masters' Union newsletter, where we break down the ideas, trends, and contradictions shaping business today.

Today's edition might make you question every "Boycott China" post you've ever seen.

Back in June 2020, twenty Indian soldiers died at Galwan Valley.

It was our first deadly clash with China in 45 years.

Within two weeks of Galwan, the government banned 59 Chinese apps.

Some you might recall: TikTok, WeChat and UC Browser.

By 2022, that number hit 267.

#BoycottChina trended for weeks.

People burned Chinese products on camera.

Sonam Wangchuk's viral video promising "software in a week, hardware in a year" got 4 million views.

We were told this was a digital strike. The beginning of decoupling.

Five years later, Chinese smartphone brands control 75% of India's market.

The trade deficit with China doubled to $99 billion.

Shein and PUBG are back alongside 36 banned apps that returned under new names.

We declared war on Chinese apps while we kept buying Chinese phones.

Paradox much?

In the age of videos / it feels nice to see written content yet being appreciated! 2nd Edition coming soon 👀

I’m just going to leave this picture here without any context. Reply with guesses on what went down 🤣

We banned only what we could afford to lose.

TikTok generated maybe $3 million quarterly from India, so banning it cost the government nothing and generated enormous political capital.

That’s 75,000+ direct manufacturing jobs, 80,000 in sales, and 1.2 million jobs indirectly affected in the supply chain.

A hardware ban would have meant immediate price increases, reduced features, and smartphone shortages affecting the digital payments infrastructure that processes trillions of rupees.

Every Vivo, Xiaomi, and Oppo phone sold in India says "Made in India." 

They have factories in Noida, and employ Indians.
But the design still happens in Shenzhen, and 75% of the parts are still imported from China.

The Enforcement Directorate found Vivo allegedly remitted ₹62,477 crore to China between 2017-2021, i.e, roughly 50% of its turnover. Xiaomi had $676 million frozen over royalty payment disputes.

"Made in India" became a flag Chinese companies could hide behind while the money flowed home.

The apps didn't even stay banned.

Shein returned in February 2025 through a partnership with Reliance Retail, who now fully own it. It operates as a technology partner with zero data access. 

Within months, it had 2 million downloads.

A February 2025 investigation found 36 of the 267 banned apps had returned to Indian app stores. 

Xender is back on the App Store, Taobao returned with a minor name change, and TanTan split its developer registration between Beijing and Hong Kong.

TikTok and WeChat remain banned as their profiles are too high.
But most others found their way back.

Pharmaceuticals: India imports 68-70% of pharmaceutical APIs from China.
For paracetamol, it's 91% and for penicillin and ibuprofen, over 95%.

Solar panels: China supplies over 60% of India's solar equipment and 100% of solar wafers. We can neither build our own panels nor meet the climate targets without Chinese components.

EV batteries: India imports 75%+ of lithium-ion cells from China. BYD-Olectra has 24% of India's electric bus market.

Rare earth magnets: Imports nearly doubled between FY23 and FY25, reaching 53,700 tonnes i.e, 93% from China. When China restricted exports in early 2025, Bajaj Chetak production halved within months.

In FY2024-25, India imported $113.5 billion from China and only exported $14.3 billion.

Record deficit of $99.2 billion.

Despite five years of Atmanirbhar Bharat, the trade deficit doubled.

But China still can’t make cutting-edge chips.

TSMC manufactures 64% of global foundry output and 80-90% of advanced chips under 7nm. Every major Chinese chip designer depended on TSMC until US restrictions cut access.

ASML holds a monopoly on extreme ultraviolet lithography machines, i.e, the $380 million devices required to make cutting-edge semiconductors. China is barred from buying them.

An official government assessment admitted that their domestic equipment is "at least 15 years behind."

NVIDIA chips power 75% of AI training in Chinese data centers. When US export controls restricted advanced GPUs, China's AI sector fell an estimated 3-6 months behind.

China's domestically developed COMAC C919 uses 100% Western engines. When the US suspended export licenses, partially completed airframes sat idle at Shanghai.

Before US sanctions, Huawei was the world's top smartphone vendor.
After the sanctions and getting cut off from Google services and TSMC manufacturing, shipments plunged 41%.

The company lost its entire international smartphone market.

China banned Google but needs ASML.
India banned TikTok but needs Chinese APIs.

The theoretical path exists and Indian brands tried it.

Micromax went from 18% market share in 2014 to near-negligible today.
Their phones were white-labeled imports from China.

When Xiaomi entered directly with flash sales and 20-30% lower prices, the game was over.

After five years of PLI schemes, smartphone exports grew from $3 billion to $24 billion.
But domestic value addition crept from 5-8% to only 19-23%. 

The gap between "assembled in India" and "made in India" still remains vast.

Hypocrisy was India’s only viable strategy.

Banning TikTok was a gesture the economy could absorb.
Banning Xiaomi would have been a catastrophe for the government.

China faces identical constraints in reverse.

Both countries perform sovereignty through symbolic bans while locked into dependencies they cannot escape.

Hit reply: What Chinese product could you personally not live without? I'm curious what the actual floor of this dependence looks like.

I read every email.

Until next week,
Pratham