India-China relations will define the IoT landscape in 2023
Tensions between two of the biggest producers of connected (IoT) devices are coming to a head, and will be changing the IoT landscape in 2023. In recent months, India and China have faced off over their disputed border in the Himalayas. The military stand-off mirrors growing tech conflict between the two superpowers.
In a relationship increasingly marked by diplomatic disputes and trade rivalry, India and China are now competing for the Internet of Things (IoT). Of course, China enjoyed more than a decade of dominance in this space. Now, in the wake of international sanctions and cybersecurity questions, India is finding more foreign support and growing its capabilities.
The rivalry is quickly turning bitter. The two nations are sanctioning companies, allegedly spying and competing for international production contracts. Under the backdrop of an expected global recession, the devolving relationship is likely to change the landscape of connected devices
Spying and security
The battlefield between India and China is both physical and digital. In addition to the recent clashes at the border, there are accusations of leveraging digital infrastructures and embedded connected devices to spy.
Last year, Chinese hackers attacked power grids in the north of India. That same year, New Delhi’s biggest hospital was compromised and brought to a standstill. Moreover, the Indian Council of Medical Research successfully blocked more than 6,000 hacking attempts from a Hong Kong server.
As the conflict escalates, the public and private sectors of each country must step up their cybersecurity. At a minimum, devices must count encrypted, direct communications, and cybersecurity leaders should review device origin in any onboarding process.
The impact of sanctions
Of course, there are consequences for these actions. India has banned more than 300 Chinese apps citing security concerns and tightened smartphone production rules in recent years. In response, China expressed “serious concerns” that it was not being treated in a fair and non-discriminatory manner. Expect this tit-for-tat to continue.
It’s worth noting that it’s not just India placing spying and security sanctions against China. As I wrote in November, British politicians recently called on the government to crack down on the use of surveillance equipment from two Chinese companies, Hikvision and Dahua. These two entities are already blacklisted by Washington. Not only did ministers criticize the state-owned companies as national security and cybersecurity threats, but they also brought into question their human rights record.
The question of production
Finally, let’s discuss device production between the two countries. Tellingly, despite a prolific production history with China, some western companies are voting with their feet and switching locations. Indian manufacturing companies like VVDN are expanding their production sites thanks to burgeoning international demand for original equipment manufacturer (OEM) devices. Chinese anti-coronavirus lockdowns, Washington pushbacks and overall geopolitical conditions are contributing to the shift.
Meanwhile, Indian device companies are also launching as direct competitors to Chinese IoT brands. For example, CP Plus offers a comprehensive range of advanced security and surveillance solutions to rival the likes of Hikvision and Dahua. As a result, Indian IoT is will grow 15% annually over the next five years.
One bump in the road is chip production. Due to a lack of capacity, India currently sources its chips from China or Taiwan. This will need to be addressed for the country to independently lead in this space. However, movement in this direction is already underway – a recent report found that India’s IoT module market grew by more than 250 per cent in a single quarter last year.
How competition breeds better cybersecurity
For many years, manufacturers only had one country of choice for cheap mass-produced devices. India’s emergence marks a major shift that will reverberate for years to come.
In my view, the country is only set to grow in IoT. They are more democratic, count fewer language barriers and have a young, tech-savvy populace – the perfect conditions for economic golden years. China, on the other hand, is coming out of the pandemic and keen to continue its tech bull run, so we cannot expect them to go down without a fight. They already have the production infrastructure. The question is whether they can keep the contracts and customers.
One silver lining: I look forward to seeing whether a new production hub ushers in new cybersecurity expectations for connected devices. Forget hard-coded admin passwords to “always on” cloud features – Indian hardware firms are regularly teaming up with European software companies to create high-grade, high-secure devices. Such devices have western countries and standards in mind. Let’s hope that competition between the two nations results in better cybersecurity for the rest of us.