This week, Google announced that it has set up a “Google for India Digitisation Fund”, through which it will invest $10 billion in India over the next 5-7 years.
This investment will be done through a mix of “equity investments, partnerships, and operational, infrastructure and ecosystem investments.”
Investments will focus on four areas important to India’s digitization:
- First, enabling affordable access and information for every Indian in their own language, whether it’s Hindi, Tamil, Punjabi or any other
- Second, building new products and services that are deeply relevant to India’s unique needs
- Third, empowering businesses as they continue or embark on their digital transformation
- Fourth, leveraging technology and AI for social good, in areas like health, education, and agriculture
Out of the $10 billion Google committed to investing in India, nearly half ($4.5 billion) will be invested in Jio Platforms for a 7.7 % stake.
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Google and Jio have made a commercial agreement to jointly develop high-quality low-cost smartphones to enable greater internet access to the masses. Google will make optimisations to its Android operating system and the Play Store to suit the needs of rural India.
The announcement by Google has come after the recent ban of 59 mobile apps with Chinese links. India had also changed its Foreign Direct Investment (FDI) rules to curb opportunistic takeovers/ acquisitions by Chinese companies amidst the COVID-19 pandemic.
Google investing $10-billion could fill the vacuum in the country’s digital ecosystem left by this clampdown on Chinese investments.
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Google had unveiled its first office in India in 2004. Since then, it has invested in a number of public projects in India. Some of the examples are- Wifi at railway stations, Internet Saathi for spreading internet awareness amongst rural women and an artificial-intelligence-based flood forecasting office
Google also invested in a number of Indian start-ups through its private equity firm named CapitalG.
On November 1, 2013, the company invested Rs 3.13 crore in Sana Ventures in the seed funding round, and Rs 3 crore in Agastya International Foundation.
Since then, it has invested in $45,000,000 in Dunzo and Rs 39 crore in the online education portal CueMath.
In its latest investment on June 24, Google put $27,500,000 in the Series E funding of a Gurugram-based company Aye Finance.
Source: Indian express
Google is investing $10-billion in India due to three main reasons:
- India has the second-highest internet user base. Broadband user base in India has crossed 500 million and Indians are using an average of 4 GB data every month. This has been projected to grow to 11 GB in 4 years. India is a significant market and assumes more importance as these tech firms like Google, Facebook, Netflix, and Twitter are not allowed to invest in China.
- All major tech firms have announced investments in India. Google does not want to be left out. Facebook invested $5.7 billion in Jio Platforms. Amazon has announced additional investments of $1 billion in India. Microsoft’s venture fund M12 also wants to open an office in India to pursue investment opportunities focusing on B2B software startups. [You may also read: Facebook-Jio Deal: What is in it for both parties?]
- Several of Google’s products and services like Google pay, free wi-fi, etc have been tested first in India before being rolled out in other developing countries in Africa and South America. This is because what is successful in India, usually works in other countries.
Most major tech-firms have announced investments in India despite the economic crisis. This is a reflection of the fact that they are bullish on India’s digital economy.
That said, India does not have adequate data protection and privacy laws to ensure that user data is protected. We should work towards strengthening our system before it’s too late.
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