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Blog / 18 Jul 2020

(Daily News Scan - DNS English) Why is Google Investing $10 Billion in India?

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(Daily News Scan - DNS English) Why is Google Investing $10 Billion in India?


The tech giant Google has recently announced to invest $10 billion in India. This investment will be done over a period of 5-7 years. This will be done under the “Google for India Digitisation Fund”. This step of investment is taken to accelerate digitisation in the country. The investment will be in various forms such as equity investments, partnerships and other arrangements. This kind of investment has utmost significance at the time when gap in the country’s tech investment ecosystem is followed by the Centre’s clampdown on Chinese technology firms.

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The tech giant – Google has announced an investment of $10 billion in India. As per Google its $10-billion fund would focus on areas like - enabling affordable access to the Internet and to information for every Indian in their own language; building new products and services in segments like consumer tech, education, health and agriculture; empowering businesses, especially small and medium ones, to transform digitally; leveraging technology and artificial intelligence for digital literacy, outbreak predictions, and support for rural economies.

These investments will be made through a mix of equity investments, partnerships, operations, infrastructure and ecosystem investments. These will include Google’s existing projects such as Internet Saathi for spreading awareness of the Internet in rural villages and an artificial intelligence-based flood forecasting system, among others.

We are not sure that the step for investment was planned from beforehand or not. While the fund may have been in the works since before the clampdown on Chinese companies. The development created an opportunity for tech majors like Google to grow their share in India’s internet pie.

Big technology companies like Google, Facebook, Netflix and Twitter are, prohibited from doing business in China. Potential hurdles for Chinese companies investing in India could provide better prospects for American giants to strengthen their position in a market which has the second-most Internet users in the world.

Google has been a helping hand to India in several of its start ups and ventures since a long time. Over the years the company has invested big amounts in Sana Ventures, Agastya International Foundation, Dunzo and in online education portal Cue Math to name a few. In one of its latest investment in June, Google invested in the Series E funding of a Guru gram-based company Aye Finance.

In comparison to the spending and investment globally, investment in India dwarves, but the $10 billion as part of the ‘Google for India Digitization Fund’ will boost Indian companies in Google’s portfolio. Between January 1, 2010 and July 13 this year, Google and its venture capital arms have invested in more than 900 companies globally. Among these, it has the maximum investments of $1.5 billion in Indonesian multi-service start-up Gojek, $1 billion in ride-sharing firm Lyft, $1.4 billion in its rival Uber, and $1 billion in Elon Musk’s SpaceX.

Apart from Google various other firms announced their investment in India. Earlier this year, Amazon announced to invest an additional $1 billion in India. This was followed by an investment announcement of $5.7 billion by Facebook in the country’s largest telecom company Reliance Jio. Last month, Microsoft’s venture fund M12 said it would open an office in India to pursue investment opportunities focusing on B2B software startups.

The move taken by Google signals a stepping up of engagement between Indian and US tech firms and underlines the continued attractiveness of the country’s digital economy, even in the midst of a severe global economic slowdown.