Google has pledged $10 billion in India over the next five to seven years with the aim of consolidating its position in the digital ecosystem of the world’s fifth-largest economy that is emerging as a battleground for global internet giants. The firm’s outlay for India — nearly double the $5.7 billion investment made by rival Facebook in the digital platform of India’s largest conglomerate Reliance Industries in April — will be deployed through a mix of investments and partnerships, Pichai told ET in an exclusive interview on Monday morning.
“We’ll do it (deploy funds) through a mix of equity investments in large Indian companies, startups, partnerships, as well as infrastructure investments such as data centres,” he said. The fund size, he said, provides an “opportunity to directly make larger investments” in bigger companies.
If the deal goes through, it will be the clincher in billionaire Mukesh Ambani’s string of deals with Silicon Valley players this year that have propelled Reliance into the e-commerce and technology space like never before.
Reliance’s digital services business unit, netted almost $16 billion in a fundraising blitz. All this at a time when sentiment in the oil market remains fragile even after prices have recovered from a two-decade low.
The flurry of deals for Jio have backed Ambani’s ambition to morph Reliance from an energy company to an e-commerce giant.
Jio is at the center of Ambani’s drive to create a homegrown version of Alibaba Group Holding Ltd. The tie-up with Facebook has given the venture a Silicon Valley stamp of approval and has lured a dozen investors, enthused by the unit’s potential to shake up online retail, content streaming, digital payments, education and health care in a market of 1.3 billion people.
“Business-to-consumer sectors like retail and digital are more resilient to economic shocks,” said Harsh Dole, an analyst at India Infoline Finance Ltd. “These sectors fetch a premium return for valuation. The stock has been a beneficiary of that, no doubt.”
Facebook, which paid $5.7 billion for about 10% of Jio Platforms, has said it expects the tie up will make WhatsApp the primary way millions of India’s small businesses connect with customers. The messaging app has roughly 400 million users in the country, about the same as Reliance Jio Infocomm Ltd.’s subscriber base for wireless services.