Google has said it plans to invest $10 billion (€8.8 billion) 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.
Confidence
“This is a reflection of our confidence in the future of India and its digital economy,” Mr Pichai said at an online event, announcing the fund.
Google's pledge 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.
In January, Amazon said it planned to invest $1 billion in India, while Apple is stepping up its iPhone manufacturing in the country through its supplier Foxconn.
Google said its “India Digitisation Fund” would be spread over five to seven years, focusing on affordable internet access, new product development tailored to Indian market needs and accelerating digital transformation, as well as healthcare, education and agriculture.
Population
India, with its 1.3 billion 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 approval for all would-be Chinese investors.
Tensions
A sharp escalation in tensions following a deadly clash on the Himalayan border last month prompted the authorities to ban 59 Chinese apps including 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.” – Copyright The Financial Times Limited 2020
