Google to Invest 12 Trillion Won in India and Partially Relocate Foxconn Production Line
Conflict with China Intensifies… 76% of US Companies "Concerned About Hong Kong Security Law"
[Asia Economy Reporter Kwon Jae-hee] US information technology (IT) companies are increasingly heading to India. It is analyzed that the conflicts between the US and China, as well as the border disputes between India and China, are influencing this trend.
According to the Wall Street Journal (WSJ) on the 13th (local time), Google announced a plan for the 'India Digitalization Fund,' investing up to $10 billion (approximately 12 trillion KRW) in India over the next seven years at the annual online event 'Google for India.'
The fund will be used to launch services targeting Indians and to build India's digital infrastructure, including healthcare and education support utilizing Google's artificial intelligence (AI).
Earlier, Foxconn, Taiwan's largest contract manufacturer for Apple, also attracted attention by announcing the relocation of some iPhone production lines from China to India.
This amounts to $4 billion, accounting for one-fifth of the total iPhone production volume that China had monopolized until now. Foxconn stated, "This decision was made at Apple's strong request to seek production bases outside China."
Additionally, Microsoft (MS) partnered with Reliance Group's telecom company Jio to introduce the cloud platform Azure to the Indian market, and Facebook invested $5.7 billion, its largest-ever investment amount, in Reliance Group, acquiring a 9.99% stake. Jeff Bezos, CEO of Amazon, also visited India earlier this year and promised a $1 billion investment.
The move of global IT companies to India is not only because it is the world's second-largest internet market but also because the interests of both sides align amid discord surrounding China. Especially with the recent implementation of the Hong Kong Security Law escalating US-China tensions, US companies are choosing India over China.
A survey conducted by the US Chamber of Commerce targeting 183 companies showed that 76% of respondents expressed concerns about the Hong Kong Security Law, with the majority being in financial services and IT sectors directly affected by the law. Among the 183 companies, seven said they would withdraw from Hong Kong and China soon, and 48% of them said they are considering long-term decoupling from China.
Some argue that this is a show of affection considering the Indian government's recent tightening of regulations targeting US IT companies. Recently, the Indian government amended the Information Protection Act to require global IT companies to notify what personal information they collect.
This regulation was implemented amid rising criticism of unauthorized use of personal data by IT companies such as Facebook and Google, and is widely interpreted as targeting US IT companies.
India is encouraged by this response. Emerging as a COVID-19 hotspot, India faces severe economic damage with 120 million unemployed and an unemployment rate of 27%. Anti-China sentiment within India has also reduced Chinese investment inflows. In April, India changed foreign investment regulations to require government approval for all Chinese investors.
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