Friday, January 21, 2022

Google’s Massive Investment Push Into India’s Digital Economy

India’s digital ecosystem is on the threshold of a truly transformative phase with the U.S technology giant Google’s proposal to invest US$ 10 billion (INR 75, 000 crore) over the next five to seven years. The objective is to roll out India-first products and services to focus on four areas crucial to digitization of the Indian economy. These include, facilitating affordable access and information for every Indian in their own language, building products and services that are pertinent to India’s unique needs, empowering businesses particularly small and medium enterprises (SMEs) on their digital transformation journey and leveraging technology and artificial intelligence (AI) for social good in areas such as agriculture, education and health.

At the annual Google for India virtual summit, Google’s Sundar Pichai, who is also the Chief Executive of parent Alphabet Inc., said the funds would be deployed to expedite Google’s efforts to spread connectivity and adopt digital technologies through “a mix of equity investments, partnerships, operations, and infrastructure and ecosystem investments”.  With 500 million active internet users in India, the company is optimistic to get to the next 500 million users. Ahead of the Google event, Prime Minister Narendra Modi said he had extremely fruitful interaction with Pichai. In a tweet he referred to a wide range of subjects discussed, particularly leveraging the power of technology to transform the lives of India’s farmers, youngsters and entrepreneurs.  The Prime Minister also discussed issues related to data security and “concerns” over data privacy in his virtual talk with Pichai. Mr. Modi urged the tech companies to make efforts to bridge the trust deficit. The Minister for Information Technology Ravi Shankar Prasad aptly highlighted the “immense scope” for Google through its application of AI in agriculture, weather protection, healthcare and modern education.

Google’s proposal to partner with the Central Board of Secondary Education (CBSE) to digitize classrooms and to work with CBSE Skill Education and Training by 2020 end to allow nearly one million teachers in 22,000 schools across the country to deliver blended learning that combines the classroom approach with online learning is a significant step. The company would extend its software, including G-Suite for Education, Google Classroom and You Tube to allow such digitization. Google is also keen to provide one million dollar grant to the Kaivalya Education Foundation through the Global Distance Learning Fund to help teachers deliver virtual education to students. Besides, it is also gearing itself to so tying up with Prasar Bharati, India’s Public Service Broadcaster through is incredible network of radio and television channels for an edutainment series for small businesses.

Business analysts have welcomed Google’s decision to invest in India as its earnest commitment to a key growth market in Asia particularly in product quality enhancement and product marketing. Considering that India remains indisputably the largest source of engineering talent, especially the malleable young talents that could be directed to the areas the company is most interested to harness for a win-win situation to both itself and to the host nation. This also holds true in rapidly evolving artificial intelligence too, where India is a sweet spot to locate high-quality talent.

It is only a couple of months ago since Google’s rival Facebook invested nearly US$ 6 billion (INR 43,574 crore) in Mukesh Ambani’s Jio Platforms to partake a piece of the growing data usage in India with Facebook at the vanguard. Amazon too announced one billion dollars investments this year, over and above the five billion dollars investments declared earlier.  Google launched as many as eight products in India which it rolled out subsequently globally. Pichai noted that the investment would be deployed for infrastructure into one of the telecom operators to broaden base and serve a larger clientele through cost reduction by economies of scale. In sum, amid concerns over Covid19 pandemic and the attendant slowdown, Google’s massive investment push bears testimony to the resilience and salience of India’s digital economy.

Script: G. Srinivasan, Senior Economic Journalist

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