US-based tech giants have, for years, coveted access to the lucrative Indian market, home to a 1.3 billion strong population that remains, in their view, largely untapped. Realising this potential though, has been no easy feat as challenges have arisen in the form of a tricky regulatory climate or poor digital infrastructure. 

Moreover, vast capital investment from the likes of Tencent, Alibaba and other Chinese investors, that has seen super-apps like TikTok and other digital offerings come to dwarf indigenous services, has also proved to be a significant hurdle for tech behemoths like Facebook, Google, Amazon and Microsoft in creating a footprint in the Indian digital economy. 

India closing doors to China will help Western investors

Following India’s ban of 59 China-linked apps, as well as the Centre’s new foreign direct investment regulations that mandate greater scrutiny around Chinese investment, the rules of the game may have significantly changed permanently, towards providing a ripe opportunity for the US-based tech outfits. Facebook has wasted no time in pursuing it, having already claimed a strategic 9.99 per cent stake in Reliance’s Jio Platforms for a whopping $5.7 billion. 

India’s telecom space has shrunk significantly to just three private players now, and there have already been some reports that Bharti Airtel and Vodafone Idea Ltd have attracted interest from Amazon and Google, respectively. As such, Facebook’s newfound confidence in India’s telecom sector may very well have opened the door for further blockbuster deals. 

The recent struggles of India’s telcos are well documented, but the COVID-19 pandemic, and the subsequent push towards a work-from-home culture may have been exactly the antidote they required. Some analysts have noted, that while the rest of the economy continues to be lodged firmly in the doldrums, India’s telecom companies have thrived following fundamental changes in India’s corporate culture. 

Jio Platforms is the market leader in the space with approximately 388 million subscribers, but with brokerage firms painting rosier pictures for Bharti Airtel in the next few years, it would be less than surprising if Amazon’s interest took a more material form. Google’s recent pledge to invest $10 billion into Indian over the next seven years is also quite timely, and may pave the way for further Western investment in the coming months. 

India’s digital payments space an avenue for growth

It isn’t just India’s telecom sector that is catching the eye though. The digital commerce space also has plenty of room for exploration. According to some experts, the likes of Facebook, Google, and Amazon, whether via Jio Platforms or other players, may be able to derive deeper insights into consumer histories and habits, thereby coming to pose a formidable threat to Indian financiers.

Finance apps that leverage the already existing digital infrastructure that a Jio Platforms or a Bharti Airtel have, may very well be part of India’s not so distant future, and now more so due to the improved connectivity that the Indian population enjoys. Google has, reportedly, already developed a custom payments infrastructure for India that requires two parties to conduct transactions knowing no more than each others’ virtual IDs. Walmart’s PhonePe has also, in recent times, emerged as a front-runner in the digital payments space. 

Given the increased attention that India is garnering from US-based tech giants, a revisioning of India’s investment regulations towards improving ease of business, without sacrificing the ability for indigenous players to compete, is certainly warranted. There could very well be promising times ahead for digital India if the central government moves swiftly to design a more favourable climate for international investors. Lethargy in doing so, will almost certainly come at an unfortunate cost to the already beleagured Indian consumer.