Updated: July 15, 2020 5:23:00 am
On Monday, the US tech giant Google announced plans to invest $10 billion in India over the coming five to seven years through the “Google for India Digitisation Fund”. Operationalised through a combination of partnerships, equity, infrastructure and ecosystem investments, the focus will reportedly be on bringing more high-quality low-cost smartphones to enable greater Internet access in the country, building new products and services in consumer technology, education, health and agriculture, and empowering small and medium businesses to transform digitally. The move 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.
Google’s decision is also indicative of a wider shift, with events over the past few weeks or so signalling a split in the tech world between the US and China. Following India’s decision to ban the widely used Chinese app TikTok, in the aftermath of the clash between Indian and Chinese soldiers on the the LAC, Mike Pompeo, US secretary of state, has indicated that the US administration is considering following suit. With Washington also putting pressure on countries to keep Chinese company Huawei’s equipment out of their 5G networks, the UK, on Tuesday, banned the purchase of new Huawei equipment by its telecom operators after the end of 2020, reversing Prime Minister Boris Johnson’s earlier stance. Meanwhile, in the aftermath of China passing the new national security law in Hong Kong, major US tech companies such as Google, Facebook and Twitter have announced that they are pausing requests for user data from Hong Kong authorities. Even as these shifts are underway, however, reducing the world’s dependence on Chinese manufacturing will be a complex and costly affair. Reconfiguring of the supply chains, most of which are centred around China, is unlikely to be achieved in the short run. For India, which imports a significant share of its mobile/internet equipment requirements from China, and has also seen huge Chinese investments in the tech space, especially in companies that have attained the haloed unicorn status, disentangling the relationship will be difficult.
For a government that has been aggressively courting foreign investment, the sheer size of the Google outlay will be heartening, especially at a time when the economy is in the midst of a deep slowdown. The move signals the tech major’s commitment to the Indian market, underlines the huge opportunity that exists, and signals the continuing global appeal of the India digital story. The government should do everything it can to deepen and widen this burgeoning market.
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