TOKYO/PALO ALTO, U.S. -- Google CEO Sundar Pichai announced Monday a roughly $10 billion fund that will invest in Indian businesses and infrastructure projects over the next five to seven years.
The move comes as recent anti-China sentiment in India, stemming from the border clashes, offers American tech companies a unique opening to reap market share without strong competition from Chinese rivals.
Pichai revealed the investment plan during a virtual meeting with Indian Prime Minister Narendra Modi. Google will apply the group's artificial technology to such fields as medicine, education and agriculture. The initiative seeks to boost internet access in India, with plans to develop a search engine in Hindi and other languages as well.
These efforts will realize the vision of a digital India, said Pichai, who was born and raised in the country.
Now the CEO of both Google and its parent company Alphabet, Pichai has become one of the most powerful tech executives in the world and one of the few Asians in Silicon Valley that head a Big Tech firm. The 48-year-old Indian-American got his start on an H-1B work visa when he first came to the U.S.
Modi's government has been calling for foreign direct investment to offset the economic shock of the novel coronavirus-driven lockdown.One contingent ramping up investment has been U.S. tech giants, as many have been eyeing the growing Indian market for a long time.
India, home to a population of over 1.3 billion, has surpassed the U.S. to become the second-largest smartphone market in the world in 2019, trailing only China.
However, the country still lags behind in technology infrastructure, leaving plenty of opportunities up for grabs. In 2018, the Indian digital transformation market generated $24.5 billion in revenue, and the market size is projected to grow to $710 billion by 2024, according to a recent report by Indian market research firm P&S Intelligence.
"Building products for India first has helped us build better products for users everywhere," Pichai said Monday at the Google for India event, referring to its GPay contactless payment system as an example.
Google is not alone in chasing after the world's second-most populated country. Many U.S. tech groups have turned to India after facing restrictions and technological frictions in China. Amazon.com has pledged to invest $1 billion in Indian small-to-midsize enterprises through 2025, while Facebook is injecting $5.7 billion into Jio Platforms, the telecommunications arm of Indian conglomerate Reliance Industries.
Besides the massive upside opportunities in the country, the timing seems to be opportune for U.S.businesses to move into India since the nation has moved to shut out China from its economy as a deadly border dispute resurfaces between the two countries.
At the end of June, India banned 59 Chinese apps from operating within its borders, a roster that includes the popular video platform TikTok. In April, the government started requiring investments originating from a country "that shares a border with India" to apply for state approval, marking a departure from automatic clearances.