Google buys a 7.7% stake in Jio for US$4.5bn

Global technology giant Google on July 15 signed a deal to acquire a 7.7 per cent stake in Jio Platforms Ltd, a leading Indian telecoms services provider, for US$4.5 billion. This is the first investment from the Google For India Digitization Fund announced earlier in the week, under which the company plans to spend US$10 billion in India over the next five to seven years to boost the digital economy. Meanwhile, Google and Jio have entered into an agreement to jointly develop an entry-level affordable smartphone with optimizations to the Android OS and the Play Store, which will expand the usage of digital tools.

The investment will be of special significance in the post-COVID-19 economy when a larger part of the population will move online for their essential activities. With the help of a range of policy, regulatory, administrative, and fiscal measures, India is adjusting to the new normal and adopting technology at a rapid pace. India, with the world’s second-largest telecoms market backed by 1.2 billion subscribers, can usher in economic growth and broader societal development with the help of digitisation. To this end, the Government through the Digital India programme has sought to bring over 1 billion people online. 

Google’s Fund will target a mix of equity investments, partnerships, and operational, infrastructure, and ecosystem investments. Doing so, the investments will focus on four areas: 1) Enabling affordable access to information for Indians in their languages; 2) Building new products and services that are relevant to India’s unique needs; 3) Empowering businesses with their digital transformation; 4) Leveraging technology and AI for societal good, in areas like health, education, and agriculture. These will be critical to building infrastructures and ecosystems that will withstand emergencies like the COVID-19 pandemic.