India open to launching own app store as start-ups criticise Google - government source

By Sankalp Phartiyal

NEW DELHI (Reuters) - India is open to launching its own mobile app store or expanding an existing one if it receives enough demand from domestic firms for an alternative to Apple <AAPL.O> and Google platforms, a senior government official said on Thursday.

The country has some 500 million smartphone users, most of whom use Google's Android platform, but Indian start-ups have criticised the company for policies they say stifle their growth.

SoftBank-backed <9984.T> Paytm, one of India's leading payments firms, protested against the U.S. tech giant's decision to remove its app for a few hours last month citing violations of gambling policies.

Alphabet-owned <GOOGL.O> Google also said this week that it will strictly enforce a policy which will levy a 30% commission on payments made within apps on its Android store.

In response to an earlier media report, a senior Indian official told Reuters New Delhi hasn't received any formal request but was willing to consider developing a mobile platform where apps could be downloaded.

"Before we open one we need to know there will be takers for it," said the government official, declining to be named as he is not authorised to speak with media.

India already runs a mobile app store that lists over 1200 mainly government-backed applications, but also Paytm, and the government could also consider expanding that instead of starting from scratch, the official added.

India's technology ministry, Google and Apple did not immediately respond to requests for comment.

Google has previously said that fewer than 3% of developers with apps on its Play store sold digital goods over the last 12 months, and nearly 97% comply with its payment system policy.

Nonetheless, several Indian start-up founders are calling for a local app store that doesn't charge a high service fee.

"It's absolutely necessary to have a local app store," said Vishal Gondal, co-founder of Bengaluru-based gaming firm nCore Games.

"If we have to give 30% fees to Google and also pay for customer acquisition, how will our budding businesses survive?"

Paytm disagreed with Google's assessment but removed certain promotions to have its app reinstated. The company's founder Vijay Shekhar Sharma has said in interviews that Google was acting as "judge, jury and executioner".

Without referring to Paytm by name, Google later said its policies were aimed at protecting users from potential harm and were applied and enforced on all developers consistently.

(Reporting by Sankalp Phartiyal in New Delhi; Editing by Aditya Kalra, Kirsten Donovan)