Indian start-ups with Chinese funding and Chinese smartphone makers are actively touting their Indian-ness to users as they seek to address a growing wave of nationalism following a deadly border clash between the two countries earlier this month.

A skirmish between India and China at a disputed Himalayan border site left 20 Indian soldiers dead, adding to anti-China sentiments brewing since the coronavirus pandemic began.

Traders have since made calls to boycott Chinese goods, New Delhi has delayed Chinese imports at ports, in its strongest move yet, India banned nearly five dozen Chinese apps including TikTok. The technology ministry said the apps were a threat to India’s sovereignty and security.

Companies such as digital payments firm Paytm, whose parent One97 Communications is roughly 40% owned by Alibaba, were quick to praise the move.

Its founder Vijay Shekhar Sharma on Twitter called the ban a “bold step in the national interest”, adding that it was “time for the best Indian entrepreneurs to come forward and build the best by Indians, for Indians!”

Sharma has often previously posted pictures of himself with Alibaba founder Jack Ma on social media.

China said India’s move to ban the apps could be a breach of World Trade Organisation rules, and urged New Delhi to create an open and fair business environment.

It also highlights the thousands of jobs domestic assembly of its smartphones and TVs have created.

Fearing anti-China backlash, Xiaomi has begun covering its brand logo on its mobile stores in some cities and is replacing it with a “Made in India” logo, according to Arvinder Khurana, the president of All India Mobile Retailers Association.

A person familiar with Paytm’s thinking said some foreign-funded firms have had to prove their Indian origin due to the pressure created by the anti-China wave.

Others like MobiKwik, a smaller rival to Paytm, have also been quick to draw on their local identity and distance themselves from any Chinese association.

Current and planned Chinese investment in India is more than $26 billion, according to a Brookings Institution report from March. A host of prominent Indian startups including online grocer BigBasket, e-tailer Snapdeal and food delivery firm Swiggy have raised money from Chinese investors.

But companies feel positioning themselves as Indian could be crucial at a time when long-simmering anti-China sentiment has come to the fore.

The app ban however, coupled with a rule imposed in April to screen new Chinese investments in India, is making some Indian start-ups in need of funding or with Chinese backers nervous at a time when funding sources have dried up amid the pandemic.

Firms in India downplay Chinese links amid wave of

anti-China sentiment