The news of Google's $10-billion investment in India over the next 5-7 years could not have been more well-timed. The search engine giant's investment plan is in line with big-tech’s bullish outlook on India. Despite the pandemic wreaking havoc on a sluggish economy, India has attracted investments from giants such as Amazon, Facebook and Microsoft this year.
Earlier this year, Amazon chief Jeff Bezos, while on his India visit, announced that the e-commerce major will invest $1 billion (Rs 7,000 crore) in digitising small and medium businesses (SMBs) in India. In April, Reliance Industries commenced its fund-raising spree with $5.7 billion from Facebook. Last month, Microsoft’s venture fund M12 said it would open an office in India to pursue investment opportunities focusing on B2B software startups.
New-found love for India?
The love for India is not a new-found phenomenon. Instead, the western companies were always vying for a share in the 1.3 billion consumer market, a literal gold mine. Nevertheless, New Delhi's proximity and preference for Chinese companies were the main hurdles in capturing the Indian market. The fact that Chinese companies were more successful in creating apps, devices and content that Indians preferred should not be overlooked here.
This, however, changed with the friends turning foes after the recent bloody scuffle at the Galwan valley. In a retaliatory move, India's act of banning 59 Chinese linked apps, including the widely popular TikTok. The US companies are pouncing on the opportunity thrown open after New Delhi's indifference towards Beijing.
Meanwhile, the COVID-19 pandemic has been a more accelerating factor for India to jump on the digital bandwagon. "Covid accelerated some of the long-term trends, be it e-commerce or speed delivery, or how we are doing this meeting and getting work done. It’s part of the reason why we are doing the fund at this time. I’m really excited by it," says Pichai.
No doubt, digital commerce will present a new growth avenue for India. Even as Jio gobbled up half of the investment in global telecom deals this year, Google’s payment app as well as WalMart’s PhonePe have been quietly scaling up.
"We expect a large portion of this ($10 billion fund) to go into actually investing in Indian companies," Sundar Pichai, the India-born CEO of Google and its parent firm Alphabet, told in an interview to The Economic Times. Google's plan is to spend $10 billion on operations, infrastructure and investments as a “reflection of our confidence in the future of India and its digital economy,” he added.
On Tuesday, there were unconfirmed reports about Google in advanced talks to invest $4 billion (roughly Rs 30,140 crores) for a stake in Reliance Industries' Jio Platforms, which has been the milch cow for India this year. The telecom company has raised a combined of Rs. 1.17 lakh crore ($15.64 billion) since April from investors including Facebook, KKR, Qualcomm, Silver Lakes and General Atlantic Singapore.
On Monday, while announcing the $10-billion fund, Pichai said Google would focus on areas such as enabling affordable access to the Internet and to information for every Indian in their own language; building new products and services in segments like consumer tech, education, health and agriculture; empowering businesses, especially small and medium ones, to transform digitally; leveraging technology and artificial intelligence for digital literacy, outbreak predictions, and support for rural economies. These investments will be made through a mix of equity investments, partnerships, operations, infrastructure and ecosystem investments. These include Google’s existing projects such as Internet Saathi for spreading awareness of the Internet in rural villages and an artificial intelligence-based flood forecasting system, among others.
"I’ve always felt India is a unique opportunity. The foundation of the country, the strong interest in technology, which I feel every time I come there. From the Prime Minister’s office, having laid out a vision for Digital India, all these are unique factors as also the size of the market," said Pichai.
Google's plan is also a shot in the arm for Prime Minister Narendra Modi's call for Atma Nirbhar Bharat. "India has local talent, access to a large market, strong entrepreneurial and venture capital foundation to see this through. As a company, we are committed to it. We are trying to develop apps in India. We want to invest in companies that are doing that. We are excited by that vision and want to help play a small role in accelerating that trend," Pichai said.
Such investments are truly a win-win for both India as well as the tech companies eyeing more market share.