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Why Google’s $10 Billion Investment Makes Sense for India


Prime Minister Narendra Modi’s Digital India takes a new turn on Monday with India-born CEO of Google Sundar Pichai announcing a hefty investment of $10 billion (Rs 75,000 crores) to help accelerate India’s digital economy. 

The announcement comes only weeks after investors including Facebook, Qualcomm and Intel invested about $16 billion (in separate deals) in India’s Reliance Industries Ltd’s digital services unit. The timing of Google’s announcement is also interesting, as it comes close on the heels of India announcing a ban on 59 Chinese apps including TikTok and WeChat. This, according to some, can help Google scale its presence and fill the void created by some of these apps, causing uncertainty in the market at present. 

Read more: Is Reliance Jio Shaping the Future of Digital India?

India: A key growth market for Google

Making one of its biggest commitments to the India market, the tech giant said the fund would be used over the next 5-7 years through equity investments and tie-ups. 

In his keynote of the annual Google for India event via video conference, Sundar Pichai said, “This (the investment) is a reflection of our confidence in the future of India and its digital economy.”

India, which boasts at least 500 million active internet users, is becoming a hotbed for tech majors such as Google, Facebook and Amazon.com among others in recent years, who have been investing in areas such as online payment, search information, infotainment, streaming content and other online areas.

This is also not the first time Google has made large investments in India. The country is already a major market for all of Google’s key products including Android, Search and YouTube over the last 5 years. 

In 2015, the company partnered with Tata Trusts to launch Internet Saathi, a program to help bridge the gender gap and deliver technology to Indian villages. Also, Google Pay, the company’s digital payments service, has already grown swiftly since its 2017 launch in India.

Read more: The Good, Bad and the Ugly of Google@21

GoogleFor Sanjay Gupta, Country Head & Vice President, Google India, the new investment is like a new chapter to be unfolded, as he said, “India’s fast-growing developer and startup ecosystem is strongly established and focused on building solutions that meet India’s needs.”

He believes, the Covid-19 pandemic has accelerated broader technological shifts, and digital tools have become a lifeline for many during this crisis. Consumers and businesses are rapidly adapting to doing more online and SMBs, schools, large companies and governments are all under intense pressure to digitize. “While this transition will be challenging, it is also an incredible opportunity to build India-first technology and services that can reach all Indians and help all parts of the Indian economy.”

Why the investment makes sense?

Needless to mention, Google has been investing in high quality technical and engineering talent in Bangalore and Hyderabad. Last year, it announced the launch of Google Research India – its AI research lab – to work in partnership with Indian academics and developers, tackling challenges in different core sectors.

Currently, Google said, its effort will focus on several key areas, including i) enabling affordable access and information for every Indian in their own language, including Hindi, Tamil and Punjabi; ii) Building new products and services that are relevant to India’s unique needs; iii) Empowering businesses as they continue or embark on their digital transformation and iv) Leveraging technology and artificial intelligence for social good, in areas like health, education, and agriculture.

While Google makes big plans for India, it needs to be mentioned that the search giant has shown signs of struggle in other markets in recent months. According to the latest report from Bloomberg News, Google abandoned plans to offer a new cloud service in China and other politically sensitive countries partly due to concerns over geopolitical tensions and the pandemic. 

For Google, India becomes an ever more important mobile market given that the company has been effectively blocked from China. This is further reflected in Pichai’s keynote, where he said he looks “forward to working alongside Prime Minister Modi and the Indian government, as well as Indian businesses of all sizes to realize a shared vision for a Digital India.”

It would now be interesting to observe if Google also considers making investments in RIL or any other entity or leverages its new and existing partnerships to spur India’s digital innovation in order to create further opportunity.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at [email protected]