BENGALURU/NEW DELHI: Google will pump in $10 billion (around Rs 75,000 crore) in India over the next 5-7 years. The money will be used to invest in local companies and build more localised products. It’s the largest commitment by a global technology major to the country. The investment — through what it calls Google For India Digitization Fund — follows commitments made by other US tech majors Facebook and Amazon this year.
“We’ll do this through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments,” said Google’s Madurai-born CEO Sundar Pichai through a video address. Its investment is focused in four areas — (i) affordable access to information in local languages; (ii) building new products for India; (iii) digitising businesses; and (iv) applying technology and artificial intelligence in health, education and agriculture.
Pichai had an interaction with Prime Minister Narendra Modi, and Google’s announcement was attended by Union communications and IT Minister Ravi Shankar Prasad and HRD minister Ramesh Pokhriyal Nishank.
“We spoke on a wide range of subjects, particularly leveraging the power of technology to transform the lives of India’s farmers, youngsters and entrepreneurs,” Modi tweeted after his interaction with Pichai where the importance of data security and cyber safety were also discussed.
Experts said that such investments are fine but should be scrutinised carefully. They also highlighted the urgency of enacting the privacy law. “Such investments are welcome but we need data privacy law, data sovereignty law and data residency law. We should be careful that the investment does not increase Google’s digital monopoly in India,” said Mohandas Pai, chairman of Aarin Capital. A recent draft report on regulating anonymised data from a government-appointed committee headed by Infosys co-founder Kris Gopalakrishnan also highlighted the issue of digital monopolies in a market like India.
At the event, Google announced two new partnerships in India. The company has tied up with Prasar Bharati to launch an edutainment series on Doordarshan on how small businesses can adopt digital tools and adapt to the coronavirus. It has also partnered with CBSE to train over one million teachers in 22,000 schools across India by the end of 2020, to deliver blended learning that combines the classroom approach with online learning, using free tools like G Suite for Education, Google Classroom and YouTube. Of course, all these will only increase the company’s access to data generated by Indians.
The US-based search engine giant is looking to double down on adoption of digital services in the country as more people stay at home following the Covid-19 pandemic. Recent border tensions with China have led to a ban on several popular Chinese apps such as TikTok and increased scrutiny on investments from that country. That’s expected to impact funding of local startups.
Google has an advertisement-based revenue model and had clocked revenues of Rs 9,337 crore, or $1.23 billion, in India in the financial year ending March 2018. While sources said its current revenues are over $2 billion in India, it reported a fall in topline to Rs 4,147 crore, or $548 million, for the year ending March 2019 due to change in accounting standards. At the same time, it has also had run-ins with tax authorities over classifying part of its revenues as cost. The government had introduced a levy on digital advertisement spending which is called the “Google Tax“. But India accounts for only a small portion of its global revenues, which stood over $162 billion in 2019.
The investment comes as India has become a key market to experiment and launch new products, including Google Pay, given the large user base and over 90% of the country’s smartphone market running on its Android operating system. “Today, 26 million small and medium businesses are discoverable on search and maps, driving connections with more than 150 million users every month. Small merchants across the country are now equipped to accept digital payments,” Pichai added in his address. Pichai also cited the success of Google Pay, which recorded 540 million transactions in May on Unified Payments Interface (UPI) and now has the largest market share in terms of both volume and value.
Centre for Internet and Society researcher Arindrajit Basu pointed out that the data-sharing terms and conditions, including privacy policies of American companies, though better than Chinese apps, are incomprehensible and open to manipulation. “There is one fundamental difference — at least on paper — between the products developed by Silicon Valley companies and Chinese apps. In the former, there is no blank cheque obligation to share data with government and intelligence agencies,” he said, adding that US companies’ policies are long, incomprehensible and full of legal jargon that can be manipulated when convenient.
Union minister Prasad said that Google’s commitment is a big boost to India’s target of becoming a $1-trillion digital economy and can help with the initiative of building one lakh digital villages. “I will appreciate if Google picks up a good cluster of villages in India in various parts and develops them as model digital villages of empowerment, skilling, healthcare, telemedicine, distant education and, most important, from agriculture to rural empowerment,” said Prasad, while also calling Pichai “a powerful symbol of the creative potential of India’s digital human resource”.