A couple of years ago, Google announced an investment of 10 trillion dollars (about 75 trillion rupees) in India. The company's Indian chief executive (CEO) Sundar Pichai announced that they would invest the same amount in India's digital services over the next five to seven years. This time they invested in Airtel to meet that goal. Earlier, they had invested in Indian rival Reliance Jio, though the two companies are rivals in the Indian market.
According to Google's announcement, Google will invest 1 billion in Airtel in 5 years. By investing 800 million, they will acquire a 1.27 per cent stake in Bharati. They will buy each share for Rs 634. With the remaining 300 million, or about Rs 2,235 crore, Google will provide capital for various affordable projects for customers, expansion of services, launch of Five-G (Indian domain creation). In addition, various areas of modern technology such as cloud or payment services may be identified for potential commercial deals.
Earlier, Google had bought a 7.6 per cent stake in Mukesh Ambani's Geo for Rs 33,636 crore. Their alliance has brought cheap smartphones to India. Now the Android operating system is making.
Google's investment in the two rival companies simultaneously raises questions of conflict of interest. However, the main answer of Airtel is that they are also working closely with many companies like Google. And in a big market like India, we have to take the path of multifaceted strategy for digital transformation. There is no dispute in that case. Because, Airtel-Google will proceed on the basis of mutual consent. According to the concerned quarters, whether it is net service or smartphone, the potential and huge market like India is a gold mine for multinationals like Google. And cheap smartphones or service projects are a tool to increase your share there.
Pichai's message is that the investment is part of Google's project to provide digital funding to India, so that more people can use smartphones, get better connections and services. Sunil Bharti Mittal, chairman of Indian Airtel, claims that the Airtel-Google alliance is to outline the progress of the country's digital journey by bringing innovative products.
Impact of repeal of retrospective tax law
Due to the retrospective tax law, the amount of foreign investment in the telecom sector in India has been stagnant for a long time. With this, India's relations with several multinational companies deteriorated. The matter has been settled by the Supreme Court of India after Vodafone was recently sued over a false income tax case. And the oil company Cairn Energy was about to take possession of the house of the Indian ambassador in Paris by court order to collect the arrears from the Indian government. Not to be outdone, Cairn sat on foreign soil threatening to seize an Air India passenger plane.
The Modi government then repealed the law in August last year. The law was enacted on the initiative of former UPA finance minister Pranab Mukherjee. That is why it is known as Pranab Mukherjee's law. It was thought that after the repeal of this law, investment in the Indian telecom sector would come again. Although Google's investment is a continuation of previous announcements, it is safe to say that the retrospective tax law has been repealed.
India does not have much reputation as a foreign investment friendly country. Still, analysts point to the lack of clarity in their telecommunications policy as the main reason for Google and Facebook's confidence in India, which is sorely lacking in Bangladesh.
Analysts say the country's telecommunications sector lacks foresight. Apart from that, the government has always been hostile towards foreign investors in this sector. They feel that the development of Bangladesh's telecommunications sector has stalled due to the failure to formulate and implement policies consistent with the ongoing massive and rapid evolution of technology.
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