Spurred by security concerns, India has blocked access to 54 mobile apps, mostly of Chinese origin, among them the game Free Fire, which is owned by Sea Ltd, government sources said on Tuesday (Feb 15), confirming media reports the previous day.
Indian authorities have made no formal comment. Sea, which is headquartered in the southeast Asian city of Singapore, also offered no immediate comment.
India has banned a total of 321 apps since political tension first flared with its giant neighbour in 2020, leading to the South Asian nation's initial ban on 59 Chinese apps, including TikTok.
Shares of Sea plunged 18.4per cent in New York on Monday to wipe more than US$16 billion from the company's market value, following reports of the latest ban.
Asked about the ban at its annual general meeting on Monday, Sea told shareholders the firm was "working through it", according to one person who attended the meeting.
India believes user data was being sent via the apps to servers in China, the government source, who sought anonymity in line with policy, told Reuters.
"This will enable them to compile huge personal data," the source said.
Such collection would allow the data to be mined, collated, analysed and profiled, most probably by "elements hostile to the sovereignty and integrity of India and for activities detrimental to national security," the source added.
The ban spells trouble for Sea, as its e-commerce app, Shopee, already faces boycott calls by traders in India, who accuse it of trade practices that hurt offline traders.
Trade group the Confederation of All India Traders (CAIT) has complained to regulators against Shopee and was 'surprised' at its absence from India's banned list, the group's secretary general, Praveen Khandelwal, said on Twitter on Monday.
Sea's Shopee, the dominant player in Southeast Asia, expanded across Latin America, Europe, and in India in 2021.