Benjamin Parkin in New Delhi and Tim Bradshaw in London yesterday
Google has said it plans to invest $10bn in India in the coming years, including
in infrastructure and equity investments, as Silicon Valley companies jostle for
a position in one of the world’s fastest-growing internet markets.
Sundar Pichai, chief executive at Google and its parent company Alphabet,
announced the scheme after speaking with India’s prime minister Narendra
Modi on Monday. Mr Modi described the conversation as “extremely fruitful”,
discussing new working practices during the coronavirus pandemic as well as
security and safety online.
“This is a reflection of our confidence in the future of India and its digital
economy,” Mr Pichai said at an online event.
The promise, which did not include specific details and was said to apply to the
next “five to seven years”, marks the latest attempt by a big US internet
company to woo the leadership of a country that has threatened to put
roadblocks in the way of Silicon Valley’s preferred ways of doing business.
India has insisted that government surveillance should take precedence over
the kind of encryption that is becoming standard in US internet services, and
has sought to limit the local power of the Big Tech oligopoly.
Jeff Bezos, Amazon’s chief executive, travelled to the country earlier this year
to promise $1bn in investment, and to support $10bn of Indian export sales
over the next five years, as his company faces a local antitrust investigation.
Google’s pledge also comes three months after rival Facebook invested $5.7bn
in Jio Platforms, the fast-growing Indian telecoms company that has launched
a series of digital services.
Jio, part of Mukesh Ambani’s oil-to-retail conglomerate Reliance Industries,
has also sold stakes to 11 other foreign investors including the investment arms
of US chipmakers Intel and Qualcomm, as well as Saudi Arabia’s Public
Investment Fund, KKR and Silver Lake.
Google has also explored investments with Jio and rival telecoms operator
Vodafone Idea in recent months, the Financial Times has reported previously.
Apple has also stepped up its iPhone manufacturing in the country through its
supplier Foxconn.
Google described its vague spending promise as an “India Digitization Fund”,
and said it would cover affordable internet access, new product development
tailored to Indian market needs and accelerating digital transformation, as well
as healthcare, education and agriculture.
India, with its 1.3bn population, represents one of the biggest opportunities for
tech companies globally after hundreds of millions of Indians started using
smartphones and accessing the internet in recent years. Google Pay, the
company’s digital payments service, has grown rapidly since launching in the
country in 2017.
The increased interest in India from Google and other US-based investors
comes as tension on the Indian-Chinese border closes avenues for investors
from China, the south Asian country’s other large source of foreign capital.
Chinese internet giants such as Tencent and Alibaba, along with Chinese
venture capital companies, have become among the largest investors in Indian
tech.
But India in April changed its foreign investment rules to require government
approvalfor all would-be Chinese investors.
A sharp escalation in tensions following a deadly clash on the Himalayan
border last month prompted the authorities to ban 59 Chinese appsincluding
ByteDance-owned TikTok.
Access to India, now the world’s second-largest mobile market, is particularly
important for Google as it is shut out of China and faces the prospect of greater
difficulty in operating in Hong Kong following the passage of the new security law
there last month.
“Google is rising to the occasion by trying to invest a fairly substantial amount
in India’s digital transformation,” said Ravi Shankar Prasad, India’s electronics
and information technology minister. “I’m very happy that Google is
recognising India’s digital innovation and the need to create further
opportunity.”
Source: ft.com
Google to Invest $10 Billion in India
Eric Bellman
Alphabet Inc.’s Google is tightening its ties to India
with a $10 billion fund to profit from the country’s
digital evolution and prove it shouldn’t be shut out
by protectionist policies.
India may be one of the last great untapped digital
marketsbecause roughly about half of its 1.3
billion people have yet to get online. It is expected
to see the largest increase of new people on the
internet in the coming years. Policy makers in New
Delhi have been trying to use that opportunity to
attract more investment while at the same time
support and protect local startups.
Alphabet had been one of the first American tech
companies to see the potential for great growth in
the South Asian nation, but it hadn’t been the one
with high profile events and acquisitions promising
multibillion dollars investments. The new fund—
dubbed the Google for India Digitization Fund—will
help policy makers see the benefits of welcoming
Google.
As the latest in a line of tech titans to target India,
Google said Monday that it has launched the fund
to invest the money over the next five to seven
years through equity investments and partnerships,
as well as in infrastructure.
“This is a reflection of our confidence in the future
of India and its digital economy,” said Sundar
Pichai, chief executive of Google and Alphabet, said
Monday at Google’s annual event showcasing its
business in India, which was held online.
He said the investment would focus on four areas:
affordable access in local Indian languages, new
products and services aimed at Indians, helping
businesses get online, and using technology to
promote social issues including health and
education.
Google, which has had operations in India since
2004, is increasing its commitment to the country
as other big America names, including Facebook
Inc.,Amazon.comInc.and WalmartInc.,have
made multibillion-dollar investment plansin the
country.
“India’s moment has arrived,” India’s Minister of
Communications, Electronics and Information
Technology, Ravi Shankar Prasad, said at the
Google online event. “I am very happy that Google
is recognizing the great power of India’s digital
empowerment, India’s digital innovation and the
need to create further opportunity.”
Google saw the opportunity in India and the many
developing markets in the world—where people
have been getting online in growing numbers
through their phones—earlier than most.
It has been designing products and modifying its
services to better accommodate what it calls the
“next billion users.”These new users are more likely
to use inexpensive smartphones with little memory
space and be connected to slow cellular networks.
It has created versions of its apps which use less
data, let people who are only online occasionally
download YouTube videos to watch later and help
those less familiar with keypads and English search
for content using voice and multiple Indian
languages. To accommodate the country’s millions
of motorcycle and scooter drivers, it added a
Google maps function to calculate how long trips
will take on a two-wheeler.
One of its most successful services launched in
India has been its digital payment app, Google Pay.
It was designed for the less affluent Indian
consumer and has been downloaded more than
180 million times and used to transfer billions of
dollars.
While India is stuck in the middle of one of the
world’s worst coronavirus outbreaks—with more
than 800,000 peopleinfected only the U.S. and
Brazil have been harder hit—and its economy is
shrinking for the first time in decades, Google isn’t
the only tech titan turning to the country in tough
times.
In April, Facebook announced a $5.7 billion tie-up
with an Indian mobile leader in hopes of tapping
into the country’s vast potential, particularly in
e-commerce.
Amazon is investing $5 billion to expand its India
operations. Walmart bought India’s biggest
homegrown e-commerce firm, Flipkart, for $16
billion in 2018.
The global brands are laying out massive
investment plans even as New Delhi has
increasingly been announcing restrictions and
requirements on how foreign companies can
operate in India and store data.
Some Indian politicians and local tech
entrepreneurs would like to see India do more to
protect its market from foreign companies like
China does so that some local champions could
emerge.
Last month, in one of New Delhi’s most aggressive
moves, it banned the use of 59 Chinese apps, citing
cybersecurity concerns. The move was seen as
payback for a bloody hand-to-hand battle between
the troops of the two countries at their disputed
borderhigh in the Himalayas. At least 20 Indian
troops died.
Beijing-based Bytedance Ltd.’s short video sharing
app TikTok, which had been downloaded more than
660 million times in India, was on the list.
Source: wsj.com, Eric Bellman at eric.bellman@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All
Rights Reserved.
