A local consumer product that sees mass adoption is the holy grail of Indian tech. Which is why every time there’s a new contender, it generates a great deal of excitement. The latest kid on the block is Zoho’s Arattai (or ‘chat’ in Tamil). Zoho itself isn’t new. The Chennai-based company has been giving Salesforce a run for its money for decades now with their enterprise software. But Arattai is their attempt at killing WhatsApp. And earlier this month, after living in relative anonymity since it was launched in 2021, the instant messaging app got the boost of its life when at least three cabinet ministers promoted it over the last three weeks.
POLITICS IN CHAT LIST
“So proud to be on @Arattai, a #MadeInIndia messaging platform that brings India closer,” Commerce Minister Piyush Goyal said in a post on X earlier this month. The attention has been infectious. Zoho boss Sridhar Vembu confirmed Arattai had a 100x jump in traffic in just three days. New sign-ups went from 3000 per day to a whopping 350,000. “We are adding infrastructure on an emergency basis for another potential 100x peak surge. That is how exponentials work,” Vembu pointed out.
For the government, promoting homegrown apps is an easy jab at the United States, with whom relations have been frosty for months now. As American President Donald Trump squeezes Indian exporters with punishing tariffs, the least India can do is, try and take a few pokes at Silicon Valley. It must feel especially sweet to help Zoho, whose rivals include Microsoft and Google, companies with Indian CEOs who did not speak out publicly against Trump’s crackdown on H-1B visas.
LESSONS FROM PAST HEROES
While this seems like the sweet recipe for getting back, the problem begins when one realises that we have been here before. There are examples of deep-pocketed players trying to capitalise on a pivotal movement. At the height of COVID, Mukesh Ambani’s Reliance Industries launched JioMeet to take on Zoom and Microsoft’s Teams. When’s the last time you heard of someone using JioMeet? There are also instances of the government promoting apps only for them to fail. The most popular example was Koo, a micro-blogging platform, which saw millions of downloads in 2021 when Goyal signed up amid his stand-off with Twitter. The app failed to hold onto its popularity, struggled to secure funding and eventually shut down in 2024.
THE INVISIBLE WEB
It is fair to argue that all apps require help to overcome network effects. Silicon Valley’s platforms are great because everyone you know is on them. They derive their power in part from their vast social graphs. Think of how much energy it takes to convince one person in your social network to join Arattai. But once you’ve convinced 100 people, the next 100 come easily. So, the argument goes, is that until it takes time f o r A r a t t a i t o achieve critical momentum, the 10 government is obligated to help Zoho. But how do you decide when momentum is reached? The biggest Indian competitor to WhatsApp was Hike Messenger, which was founded by Kavin Mittal, the son of Airtel boss Sunil Mittal. At its peak, Hike had 100 million registered users but still struggled with finding a business model and ultimately lost out to WhatsApp.
After Prime Minister Narendra Modi called for local social media platforms in his Independence Day speech, Mittal took to X to lament the death of Hike. “We shut it down with 20M+ actives. Just because we’re very good at something doesn’t mean we can win. The network effect is too strong globally. Would have to be a China-like situation for us to reconsider,” Mittal said glumly. What Mittal conveniently ignores is that we did have a near ‘China-like’ situation when India decided to ban TikTok after the Galwan Valley clash in 2020. That was a once-in-a-lifetime opportunity for homegrown, short-form video apps like Moj (owned by Sharechat) or Josh, which saw unprecedented growth in the months after the TikTok ban. But one by one, they fizzled out. The near-consensus view among industry experts is that it has ultimately been Facebook’s Instagram and Google’s YouTube, with their Reels and Shorts products, that have been the ultimate winners of the TikTok ban.
PATRIOTISM ISN’T ENOUGH
The sober truth is that patriotism doesn’t drive a meaningful shift in consumer behaviour. People use what’s convenient and what works for them. A swadeshi product may see a spike in popularity every time Pakistan attacks or when White House officials launch new tirades against India’s protectionist policies. But sustained usage can only happen if the product is good enough to stand on its own feet.
Most users would say Koo, Hike, and JioMeet were inferior products, and it showed in terms of their adoption. Which brings us to Arattai. Its spotlight has already been marred by onboarding issues. The company acknowledged a little over a week ago that some users may experience “OTP delays/failures, slower contact sync, or call issues due to unexpected load on our servers”, adding that the app was in the process of expanding its infrastructure. On top of that, Arattai is also missing a core security feature expected of any instant messaging app – i.e., end-to-end encryption. This prevents both hostile actors and governments across the world from snooping on the contents of your messages and is a widely accepted industry standard. Vembu has told a media publication that they are currently “working on”. “In personal messaging, we already offer a ‘secret chat’ option that allows users to enable encryption for private conversations. While it is not default yet, the entire team is focused on making it available to all users soon,” Vembu said.
TAMING THE TITANS
It may be unfair to ask Arattai to be a world-class product when it’s still starting out. But the public’s attention is notoriously short, and some could argue that its window to build up enough momentum to overcome WhatsApp’s considerable advantage is closing rapidly. In a few months, its chance could be gone. Which brings us to the broader takeaway of what the government really wants when it promotes swadeshi apps like Arattai. Its grievances with foreign technology companies are clear: CEOs who sit in California generally chafe when it comes to following local laws. Privacy and data security are also concerns, which include issues with the personal information of Indian users flowing to foreign servers. And finally, with social networks, there is the ominous question of how foreign interests could use algorithms to manipulate public debate within India.
If Indians used Indian tech platforms, this would solve all of these headaches. Unfortunately, that’s not how it has played out. So what options does the government have? The first, and most alarming, path is to mimic China and ban all foreign tech companies from offering services within India. A more palatable option would be to force Silicon Valley players to partner with local entities, offering the government some leverage.
That successive protectionist governments have not even hinted at this, shows they understand it would spark widespread outrage, torpedo relations with the United States and almost certainly fail to stand up to constitutional scrutiny. It’s easy to cite national security concerns and ban TikTok, less so with Google. The second path, which makes far more sense, is to accept the wisdom of the old adage that ‘governments have no business in being business’. It’s fine for India to promote local businesses through broader policies, but silly for them to try and pick winners or become their brand ambassadors.
But that doesn’t mean we should ignore the need to regulate foreign tech platforms and achieve national priorities. Many countries around the world show that they can be tamed very effectively. In India, initial attempts are already starting through the updated IT rules and the relatively new data protection law: social media platforms are now required to appoint grievance officers and justify why they take down certain content; the grievance appellate committee can mandate the content be reinstated as well. And, of course, the Reserve Bank of India was well ahead of the curve by mandating that financial intermediaries store key customer and payment information within local data centres.
More ambitious and audacious ideas are possible as well. While Trump’s deal with TikTok comes with many problems, it shows how a tech company’s algorithm, until now treated as a top corporate secret can indeed be shared with local firms and retrained using local data to prevent national security concerns.
‘The possibilities are indeed endless. Zoho’s Arattai may turn out to be a success and indeed deserves support from Indian users. But if it does fail, that should not derail India’s broader aims. Regulating foreign tech platforms merely requires imagination, a willingness to strictly enforce regulation and the art of persuasion – three tools that the average Indian policymaker severely lacks.
