Why Silicon Valley's biggest companies invest billions in India?

Why Silicon Valley’s biggest companies invest billions in India?

Amazon (AMZN) He pledged one billion dollars In January, Facebook social networking site (Php) Invested Nearly 6 billion dollars in late April and Google (GOOGL) All of them topped up last week with 10 billion dollars commitment. They are part of a wave of investment in India’s technology industry this year which now exceeds $ 20 billion, most of which comes from the United States.
The size and sources of these investments seemed largely intolerable, if not unimaginable at all, just months ago when all these tech companies were In a collision course with Indian regulators And tech executives bore the cold shoulder when visiting New Delhi.
Much has changed since then. The coronavirus has devastated the global economy, and hit India hard. The diplomatic row between India and China spilled over into technology, bringing it in line with the Trump administration’s mistrust of Chinese companies. And while India has always been a major magnet for American technology companies, the Shrinking range For technical cooperation with China New threats to set foot Places like Hong Kong are giving new prominence to the Indian market.
But the investment influx also highlights something that has been true now for years: India’s digital economy, with over 700 million internet users and nearly half a billion users to date, is simply A very big prize For Big Tech to ignore it for a long time.

“People are confident that India will be a good market in the long run, and that its laws in the long run will be fair and transparent enough,” said Jay Goleish, who heads the technical policy at the US-India Business Defense Group. board. “I think these are deep roots that already exist.”

China Factor

Silicon Valley has been largely closed out of China for years, thanks in part to the country’s huge censorship mechanism dubbed the Great Firewall. The controversial new National Security Law in Hong Kong, where Google and Facebook services are still available due to the relatively unrestricted Internet, can Push them away.
The law grants the Hong Kong authorities sweeping authority to regulate technology platforms, including ordering them to remove posts that threaten China’s national security or restrict access to their services. Facebook, Google and Twitter said they would Stop sharing data With the Hong Kong government, while TikTok did He left the city Completely.

“Dealing with China is harder and harder,” said Mark Limley, director of law, science and technology at Stanford University. “There is also a growing feeling that dealing with China implies disturbing moral concessions.”

US lack of confidence in Chinese technology Keeps growing. President Donald Trump last week claimed credit for thwarting expansion plans for Chinese technology company Huawei, and his administration said it was “looking into” a ban on the famous short video app, TikTok, owned by Chinese company ByteDance.
It is a move that would make the United States more connected to India. Indian government TikTok and dozens of Chinese apps banned Last month, after a border clash between the two countries that killed 20 Indian soldiers, it led to calls to boycott Chinese products. Despite the technical relationship between India and China Still deep – Chinese smartphones dominate the Indian market, and most startups in India have significant Chinese investment – recent tensions could boost long-term technical ties between India and the United States.

“India and its neighbors in Southeast Asia have tried to balance the two powers by building greater economic ties with China while sticking to the security umbrella the United States offers,” said Ravi Shankar Chaturvedi, director of research at the Tufts University Business Institute in India. The global context. “By recent measures, China has effectively handed over the United States to India for one generation.”

Chaturvedi and other experts point out that India and the United States have a long-term technical relationship, with thousands of Indian engineers across Silicon Valley and Indians currently working at the head of Google, Microsoft and Many other American companies.

“There is a natural synergy between India and the United States in the digital sphere,” Gulesh said, adding that greater use of the Internet by Indian families to mix and work more than their homes during a coronavirus pandemic could boost India’s attractiveness as a market. “It is easy for American companies to look to India in search of opportunities,” he said.

The richest becomes the richest

While American tech companies were looking to the Indian market, the wealthiest man in Asia seemed to position himself as a willing gatekeeper.

Most technology investments in India this year – including Every Facebook And Almost half of Google Enter the coffers of companies controlled by Indian billionaire Mukesh Ambani. Jio Platforms, the digital subsidiary of Ambani Reliance Group, has raised more than $ 20 billion since late April from companies, Venture capitalists And Sovereign wealth funds Looking to use it as a fast channel for India’s massive digital economy.
Jio was launched as a mobile network in 2016 and soon collected about 400 million subscribers. With recent invasions in e-commerce, digital payments, streaming services, and even a video conferencing platform like Zoom called JioMeet, Ambani seems to be looking to transform the company into a comprehensive Indian ecosystem.

Silicon Valley clearly wants to enter.

“American technology was not able to penetrate” The Great Firewall of China “but it was easier for her to enter the” Great Firewall in India “established by Jio; all she had to do was pay Reliance fee fees to enter, said Chaturvedi.

Microsoft CEO Satya Nadella with Mukesh Ambani during the Microsoft Future Decoded Summit on February 24, 2020 in Mumbai, India.

As one of the largest companies in India run by the richest man in the country, Reliance has a tremendous amount of local influence and is not overburdened by numerous regulations related to data storage and e-commerce that have been obstacles on Facebook, Google and Amazon.

“No global participant could manage this successfully and quickly on its own like Reliance,” said Chaturvedi. “Many e-commerce and data localization laws have been affected by accreditation.”

As Trump is increasingly managing The American economy is closed from the rest of the worldAccording to Lemley, Silicon Valley will be looking to expand. India is ready to choose.

“As much as it pains me to say that, the United States is not nearly as attractive a place for innovation as it was five years ago,” Limley said. “Since the Trump administration is making it harder and harder to bring the best and brightest people from all over the world into Silicon Valley, I think technology companies may be looking towards a world where we are no longer the center of innovation.”

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