India bans 54 Chinese apps; Sea shares sink, says it complies with laws

India has blocked access to 54 mobile apps, mainly Chinese but also including Singapore-based Sea Ltd's Free Fire game, over security concerns, government sources said on Tuesday, a day after Sea shares sank 18% on a report of the ban.

India has banned a total of 321 apps since political tension first flared with China in 2020 following a border clash between the nations, leading the former to initially ban 59 Chinese apps, including TikTok. 

Sea, investors in which include Chinese gaming giant Tencent with a stake of 18.7%, on Tuesday said it is a Singapore company and committed to protecting its users' privacy and security in India and globally.

"We comply with Indian laws and regulations, and we do not transfer to or store any data of our Indian users in China," it said in a statement to Reuters.

Tencent did not immediately respond to a request for comment.

In premarket US trading on Tuesday, Sea's shares were up 4% above $134. Shares of Sea had plunged 18.4% in New York on Monday, wiping more than $16 billion from its market value following reports of the latest ban.

Asked about the ban at its annual general meeting on Monday, Sea told shareholders the firm was "working through it", according to one person who attended the meeting.

The other apps banned include Tencent Xriver, Barcode Scanner - QR Code Scan, Rise of Kingdoms: Lost Crusade and Viva Video Editor.

India believes user data was being sent via the apps to servers in China, the government source, who sought anonymity in line with policy, told Reuters.

Such collection would allow the data to be mined, collated, analysed and profiled, potentially by "elements hostile to the sovereignty and integrity of India and for activities detrimental to national security," the source added.

The ban spells trouble for Sea, as its e-commerce app Shopee already faces boycott calls by traders in India, who accuse it of practices that hurt offline traders.

Trade group the Confederation of All India Traders (CAIT) has complained to regulators against Shopee and was "surprised" at its absence from India's banned list, the group's secretary general Praveen Khandelwal said on Twitter on Monday.

Sea's Shopee, the dominant player in Southeast Asia, expanded its reach in 2021 across Latin America, Europe and India.