India banned Krafton's game due to worries over data sharing with China.
According to an Indian government source, India's government prohibited a popular battle-royale game by Krafton Inc (259960. KS), a South Korean business funded by China's Tencent (0700. HK), because it was worried about data sharing and mining in China.
According to the government official and another source with direct knowledge, New Delhi utilized its authority under Indian IT legislation to restrict Battlegrounds Mobile India (B GMI), relying on a clause it has used since 2020 to block a number of other Chinese apps due to national security concerns.
The Indian government has not made the public aware of the blockage. However, the software was removed from Apple Inc.'s (AAPL.O) App Store and Alphabet Inc.'s (GOOGL.O) Google Play Store as of Thursday evening in India.
The withdrawal of B GMI follows India's 2020 ban of Player Unknown's Battlegrounds, another Krafton game with more than 100 million users in the South Asian nation (PUBG).
Following a months-long border impasse between the nuclear-armed foes, New Delhi banned more than 100 mobile applications with Chinese roots as part of its crackdown on the popular game PUBG.
Since then, the prohibition has been extended to more than 300 applications, including the well-known gaming game "Free Fire," which is owned by Singapore's Sea Ltd. technology company (SE.N).
According to Krafton's regulatory filing, Tencent owned a 13.5 percent ownership in the company as of the end of March through an investment vehicle.
Following the announcement, Krafton shares fell more than 9% before recovering to close the day down 4.5 percent in Seoul. The company claimed in May that India contributed a high single-digit proportion of the business's sales in the first quarter of this year.
Shares of Tencent Holdings dropped 4.9% to their lowest level since March 15.
While Apple and the Indian IT ministry did not reply to calls for comment, a Google spokeswoman said that the company had stopped the game as a result of a government decision. Because such directives are private, the sources declined to give their names.
An inquiry for information was not immediately answered by the Chinese embassy in New Delhi.
According to a Krafton spokeswoman in Seoul, the developer was in contact with the appropriate agencies and businesses to determine the exact circumstances of the suspension in India's two major app stores.
Sean Hymnal Sown, CEO of Krafton India, stated earlier this week that "BGMI conforms to all standards" in India and that the Indian authorities have already observed that PUBG and BGMI are separate games.
China's influence
According to the two people with first-hand knowledge who spoke to Reuters, India used a provision of its IT legislation known as 69A to enact the ban.
In the interest of national security, among other reasons, the clause enables the government to obstruct public access to content. Orders made in accordance with this clause are often of a confidential nature.
According to Prahar president Abhay Mishra, the Swedish Jag ran Manch (SJM) and nonprofit Prahar have frequently requested that the government look into the "Chinese influence" of the B GMI. The Rashtriya Swayamsevak Sangh, a significant Hindu nationalist organization allied with the ruling party of Prime Minister Narendra Modi, has an economic section called SJM.
According to Mishra, "In the so-called new avatar, the BGMI was identical to the previous PUBG with Tencent still managing it in the background."
Popular Indian gamers responded angrily to the restriction online on Twitter and YouTube.
Abhijeet Andhare, who has more than 92,000 followers on Twitter, wrote: "I hope our government knows that thousands of esports athletes and content producers and their lives are depending on B GMI."
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