Indian Prime Minister Narendra Modi (L) and Facebook CEO Mark Zuckerberg have a conversation on stage during a town hall at Facebook's headquarters in Menlo Park, California September 27, 2015. REUTERS/Stephen Lam

MUMBAI (Reuters Breakingviews) - For global technology giants looking for growth, India was supposed to be an easier hunting ground than China. But New Delhi’s plan to compel the likes of Facebook and Alphabet’s Google to actively police user-generated content threatens free speech. Coming after edicts that limit foreign giants Amazon and Walmart in e-commerce, the rules suggest India may not be a much easier bet than the People’s Republic.

The proposal, made by the technology ministry in December, addresses a real problem. It’s an effort to curb the spread of misinformation after mob violence linked to messages circulated on Facebook-owned WhatsApp, which counts India as its largest market. The draft demands companies pre-screen user content, remove unlawful material within 24 hours and provide a way to trace the user. India is also asking any content provider with more than 5 million users to be locally incorporated.

If enacted, the policy would reduce various tax benefits and liability protections that consumer-facing tech companies enjoy as a result of being based in the United States, and elsewhere. An alarmingly broad definition of what constitutes “unlawful content” also leaves plenty of scope for self- censorship and enforced censorship in the run-up to a general election that must be held by May.

A lobby group which includes the big U.S. names has criticised the plan, ratcheting up trade tensions between the two countries. Local companies, including billionaire Mukesh Ambani’s Reliance Jio and social network Sharechat are less concerned with the interference. Certainly, India is not the first to seek to curb the internet and use it on their own terms, benefitting domestic players in the process.

But it’s a blow for tech behemoths who viewed the country of 1.3 billion people as a way to compensate for problems they have faced in larger and much richer China, which has, for years, banned the services of Facebook and YouTube owner-Google.

India’s sheer size and potential allow it to make some demands. But companies like Google have faced significant backlash at home when they have attempted to bow to the demands of authoritarian regimes. Now that India has almost half a billion internet users, foreign companies may find that prize comes with strings attached.