The ongoing tussle between the Indian government and the social media giants, most of which are headquartered in the US, has attracted international notice, including from the United Nations (UN).

On 20 June, the UN's special rapporteurs wrote to the Indian government expressing serious concerns over new digital rules, urging India to withdraw, review or reconsider certain aspects of the new guidelines.

India’s IT rules require social media businesses to appoint grievance and nodal (or liaison) officers respectively to handle complaints from users and to help law enforcement agencies. Twitter, YouTube and WhatsApp have started boosting their Indian staff with these new roles.

The third IT rule, however, is of particular concern to networking apps: it requires app companies to help Indian agencies trace the origin of problematic content on their platform should it need to be investigated.

Twitter expressed concerns about the “threatened freedom of expression” in India. Escalating tensions have prompted many to wonder about the possibilities of potential foreign investors getting scared away by the stern Indian policies and dropping plans of investing in the country.

Talking to Sputnik, senior tech expert Kunal Kislay said that investors must not be scared by Indian policies which provide holistic security to the nation.

“India is one of the largest markets in the world – especially in terms of the tech and social media industries. Foreign investors may not be able to avoid penetration in such a great market anyway. The interested investors, before pulling out from plans of entering the Indian market, should have a dialogue with the authorities explaining their business models. Transparency and accountability in cases of discrepancies work in the interest of India, as well as the companies that want to set up shops here,” Kislay said.

Recently, Twitter - which is used by more than 17.5 million Indians - lost its legal protection in India. The platform failed to comply with India’s digital laws and expressed concerns regarding the "threatened" status of freedom of expression in India, and WhatsApp, which has more than 390 million Indian users, approached the Delhi High Court to complain about the Indian IT laws.

Detrimental to India’s Socio-Economic Prowess

Talking to Sputnik, Kazim Rizvi, the chief of Indian tech policy think-tank, The Dialogue, said that these disputes between tech giants and the Indian government need to be settled as soon as possible. Foreign apps bring international influence and opportunities to bolster India's socio-economic prowess.

“Providing a congenial business environment to these foreign companies and investors is crucial to ensure India’s overall development both at the internal and external level. While it is critical to ensure that these companies comply with the laws of the land, it is also important to provide them adequate assistance when a particular policy is found to be too stifling,” Rizvi said.

In a bid to ease tensions between the Indian government and social networking giants, the chief of The Dialogue believes that “the government must engage with these companies through talks and feedback to understand better the challenges they may be facing”.

Tech experts in India have suggested that to retain the influx of foreign cash in India, the country must consider making reasonable changes to the rules, without compromising the legitimate national interests.

Will It Affect Planned Investment?

American tech giants such as Google, Amazon, and Facebook announced a series of investments worth around $20 billion in 2020, the year when the COVID-induced lockdown stopped the Indian economy from growing. In a monthly bulletin last week, the Reserve Bank of India estimated that the Indian economy may lose more than $27 billion as the country continues a slowed-down battle with the virus.

Amazon, which is at loggerheads with the Indian government over e-commerce regulations, has Pledged to invest as much as $6.5 billion in the country. Last year, Facebook invested $5.7 billion in Reliance Jio to attract small businesses through WhatsApp. Alphabet Inc's Google also injected around $4.5 billion into Jio last year from a newly created $10 billion fund earmarked for investment in India by 2025.

However, despite the tussle having gone on for months, these tech giants have not expressed any second thoughts about investing in India.