Why is Google Investing $10 billion in India? — A Detailed Analysis
Google is not only investing in India’s digital future, but is pretty smartly striving to be a major player in India. Here’s how !
Google CEO, Sundar Pichai recently had a virtual meeting with the Indian Prime Minister, Narendra Modi, and announced a $10 billion investment in India over the next 5 years.
“We’ll do this through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments. This is a reflection of our confidence in the future of India and its digital economy,” ~ Sundar Pichai
He promised to invest in the following areas.
- Enabling affordable access and information for every Indian in their own language.
- Building new products and services that are deeply relevant to India’s unique needs.
- Empowering businesses to continue the journey on their digital transformation.
- Leveraging technology and AI for social good, in areas like health, education and agriculture.
Many are calling this move by Google as Pichai’s loyalty to his home country. Though this may be true to some extent, but there is a completely different side to this story looking from Google’s perspective. Here is my analysis of what it means for Google to invest in India at this point in time — it’s a deep dive, so keep yourself buckled up.
India is HUGE !
With the recent influx of a huge portion of Indian population into the online community, India has become among the world’s fastest growing internet markets. Thanks to the boom of affordable internet and smartphones brought in by JIO and many phone manufacturers.
In 2020 alone, Facebook announced a $5.7 billion in India through JIO platforms, while Amazon announced a $1 billion investment. Even Qualcomm, the largest smartphone chip manufacturer, promised to invest nearly $1 billion in the JIO platform for future 5G rollout. A majority of these new booming internet users are the youth, who are always keen on trying anything new — be it a new app, a new smartphone, or even new kinds of jobs such as Amazon’s delivery executive. This is evident from the fact that in the last couple of years, the Indian population moved swiftly from PayTm to Google Pay and PhonePe.
Tensions between China and India
There has been a clash between India and China on its borders (LAC) which gave rise to diplomatic tensions between the two countries. This led to India banning 59 Chinese apps from being used in the country. Moreover, many phone manufacturers are planning to move their manufacturing operations to India, to not only support PM Modi’s Make in India initiative, but also win the goodwill of the citizens.
This would be the perfect time for an American company like Google to launch apps, services and devices in one of the largest Android markets worldwide. This would mean more and more revenue for Google, and an option for it to emerge as a trusted brand in India.
In 2015, Google launched the free WiFi called RailWire at all railways stations in India. Railway stations are one of the most crowded spots in India due to its cheap and popular rail network. Most of these crowds belong to the weaker economic section of the country, who got a chance to join the online community for the first time with RailWire. This meant more people using Google’s services like Search and YouTube. As internet prices got cheaper in India, Google ended the RailWire program in 2020. However, by then it had already got millions of new people on board their services.
India is becoming a competitive market
American giant Facebook recently invested a huge deal in India’s leading mobile network and service company, JIO.
JIO is one of the largest mobile network and service provider in India. It is affordable, provides great service and most importantly, it’s Indian. This makes it loveable by almost every Indian. Recently, JIO started investing in providing alternative to the popular video conferencing app Zoom, by introducing its own version, JIO meet. This means that Google needs to work its way hard to promote its competitive apps like Google Meet and Google Pay, to compete with the homegrown players like JIO and PhonePe. With the 2016 demonetization that happened in India, many businesses went digital, while there are still many struggling their way to join the huge online platform. If Google can help such businesses with digital transformation through their services and solutions, then it might just have the edge in becoming a major player in India leading the digital transformation.
To Conclude . . .
India is becoming a fast growing and attractive market for large investors. The recent rivalry between the USA and China, is leading major American tech companies to invest more in India. It perfectly aligns with the country’s “Make in India” campaign which lives in the heart of every Indian. This will not only help India’s economy and bring up the weaker section of the society, but also would be huge boost to the trust these companies would have among Indians. This would mean easier investments in the future, easier acceptance by the people and all in all, a Win-Win situation.
I hope you liked this article and my analysis of the huge investment Google made in India. You can read a few of my other popular articles here.
