The meteoric rise of Zoho’s messaging app Arattai in India looks like a real-world example of aapada mein avsar (opportunity in adversity), a stage prop which usually serves to dress up debacles as challenges that fortune considerately strews in our path. The app debuted in 2021 and enjoyed indifferent growth until the end of September, when its graph suddenly soared―it was being downloaded over 100 times more frequently than before and hit 2 million downloads in a single day on October 1. The earlier baseline was about 3,000 downloads per day.
The Arattai surge was propelled by a concerted wave of endorsements from Union government ministers, whose data and communications are hosted by Zoho to secure digital sovereignty. And these were actually proxy endorsements of the prime minister’s call for post-Mahatma swadeshi, even in the choice of messengers. And that, in turn, was an aapada mein avsar response to the tariff war being conducted against India by Donald Trump, an attempt to paper over India’s foreign policy setback by dressing it up as an opportunity to support Indian enterprise with Nehru-Gandhi era protectionism. And the windfall beneficiary of this intricate web of global and local forces is Chennai’s digital entrepreneur Sridhar Vembu, who promoted Zoho and Arattai.
The primary question is: though tariffs are now spurring protectionism, in the long run, will they actually encourage India to integrate more deeply with globalisation and explore new markets, abandoning protectionist barriers that could have been thrown out long ago with the licence-permit raj? For decades, there’s been a case for overhauling frameworks and attitudes to the boilerplate on which the nation runs, but the efforts have been piecemeal, slow and incomplete.
For instance, Bibek Debroy had highlighted dated legislation from the 1990s and finally the statute books were updated in 2023―though imperfectly. Another example: dual citizenship should have been a priority for a nation with the world’s biggest diaspora, not gingerly steps like the overseas citizen of India identity. In personal finance, while a large class of Indians is very literate about overseas stock markets, they can access them only through the telescopically restrictive liberalised remittance scheme. Ironically, India has also toyed with de-dollarising foreign trade, a revolutionary project.
Reforms don’t go all the way because of ancient fears, especially of foreigners, their hidden hand and the dollars it clutches. I remember a conversation long ago in the Norwich home of the Tamil translator Lakshmi Holmström and her husband Mark, who had pioneered work on aspects of Indian labour. The conversation turned from the borders between languages to ones that hem in our economy.
“Do you seriously think that India should still have a controlled currency?” asked Mark. The 1997 East Asian financial crisis was still vivid in memory. Ten nations had accused George Soros and financial shamans of rigging currency markets in order to bring down their governments, while India remained a safe zone because of RBI controls. “Yes, please,” I replied. Rarely have I seen a man as exasperated with human stupidity as Mark was with my opinion.
Looking back, I wonder if I sought safety because of nebulous fears of barbarians at the gate. Keeping them out is generally a good idea, but globalisation is an even better idea. Nations can’t maximise its benefits without exposing themselves to its risks, which they must learn to manage. And governments have no business restricting people’s freedom of choice on the pretext of keeping them safe.
That seems to have happened in the case of Arattai, which was talked up by ministers as a swadeshi alternative to WhatsApp ― which it isn’t, because the level of privacy is different. What lies ahead? Arattai could repeat the story of Koo, the swadeshi Twitter that the government embraced when the original refused to follow its diktats. After an initial surge, it dwindled to nothingness.
The Indian government has a history of relations with the corporate sector which differs from that of other major Asian economies. After World War 2, Japan scaled up rapidly because it had a culture of agreement between its government and corporations, whose goals converged via the business body Keidanren. Earlier, family-owned zaibatsu like Sumitomo and Mitsubishi controlled industry tightly and could speak directly with the government. Their power was diluted after World War 2 to democratise markets.
But South Korea’s chaebol like Samsung and Hyundai retain a similar role even today. China has developed a kind of party-controlled capitalism which retains communist goals. For instance, it downsized Jack Ma because the state wanted to see a lot of lesser entrepreneurs succeed, instead of a small number of immense corporations. That’s a characteristic of American business, which India is following. And yet most Indian enterprises are in the small, medium and unorganised sectors, which never interface with the government and have no way of being on the same page.
The success of Arattai suggests that people are susceptible to nudges from the government and aligned corporations. But historically, Indians have had a healthy suspicion of both. Maybe it’s because the world’s biggest transnational corporation also served as the government of India for a long time―the East India Company. That experience of organised loot remains in the memory, and usually prevents Indians from trusting too much, too foolishly.
Pratik Kanjilal | SPEAKEASY | Senior Fellow, Henry J Leir Institute of Migration and Human Security, Fletcher School, Tufts University
(Views are personal)
(Tweets @pratik_k)
