With all these, This investment from Google seems another strategic move by an American company to say that we're truly concerned about Indian growth. So that their development centers here or products made for India don't get flagged as American.
Reference - Foxconn, Intel, Qualcomm, Facebook
To be fair, Mukesh has got good connections everywhere. He is India's most powerful person.
Amitabh and the Shahrukh (some of the world's richest actors, both half billionaires) both volunteered as servers at his daughters wedding as a show of appreciation. If a man can command the most powerful of his country to such level of willful subservience, then every Govt. will try to curry favor with him.
I will add, that while his intentions might be entirely selfish, the pace at which Jio was able to bring affordable 4G to the whole country is incredibly empowering for rural / small town India.
That being said, adding money to the pool of what is quickly becoming a monopoly is not a "fund to digitize America" as Pichai put it.
> can command the most powerful of his country to such level of willful subservience
To me there's a disconnect between the two phrases. I don't think they were volunteering to humiliate themselves, but rather to show how close they were. Let's say hypothetically that Bill Gates had become really good pal with Jeff Bezos and that you went to an event that one of the two had organized and you saw the other serving the punch, would you say that he's being subservient?
I don't know about you, but when I hear "working as a server at a wedding attended by many powerful people", I don't think "subservience", I think "unique opportunity to make connections, and to potentially snoop insider information."
Also note, Amitabh is in his late seventies. I doubt he is interested in connections at his age.
In India, it's common for hosts to serve food as a sign of respect to their guests. Close friends and family of hosts also join. This only showed the closeness of the relationships among Mukesh and other stars. Seeing it as a subservient act isn't accurate, no big star would sign up if it were so.
Beyonce did a show too. So did a lot of Bollywood celebrities. These celebrities do paid gigs at these ultra rich wedding parties.
Not too long ago, it used to be that family and friends would get together to cook for the wedding.
Or does it essentially never come up because a typical Indian would use lakh/crore instead? Is there's something like a "lakh croreaire"?
As for millionaire/billionaire, imo it's hard to tell but on HN I would infer USD. (Amitabh Bachchan's net worth is ~$400M based on a quick search.)
The North Indian equivalent is called so. Atleast, In TN we have our own version of the show, based on the same "Crore" denomination but not thus called.
Exactly. USD is almost always implied when million/billion is used
On the topic itself, it's unclear what Google's intentions are and how they could benefit from such an investment. $10B is not a big sum so is the purpose altruistic or as grease for other purposes?
Afaik, the Ambani dynasty of 2 generations has been India's richest for about 30 years now.
He gets foreign technology and just jumps in any sector with governments blessing. Be it oil and gas, infra projects or even telecom
Companies do whatever their owners tell them to do. What you are talking about one specific model of what some people think they should do and what purpose they should serve in society. A very popular and possibly even 'default' model, but only one of many.
that said, assuming altruism here even if there aren't immediately obvious benefits to the company would probably be a bit naive.
Then there is an average indian feeling pride about how Jio is able to attract such investments. So, some of us may have considered it, and would have spoken about it, but a lot are not really aware. When people do speak against these, they are usually tagged as cynical or contrarian because speaking against a public figure in India is sometimes considered speaking against India.
P.S. Sorry for being so vague, but this requires a lot of context to ascertain why it is this way. I dont blame whatsapp or Facebook, just that we are a vulnerable bunch and usually believe what we want to believe.
Mukesh Amabani, is mostly raising money because he had simply too much debt, and he is also getting old. It could also be a part of larger succession planning. His kids are not that much hands-on into business as much as he was with his father. It makes sense to have a Tata Sons Trust like scenario where professional managers runs the companies while the companies are owned through a holding trust owned by his children.
The experiment with Anil Ambani's mismanagement and the state he has left his business is a lesson for Mukesh to not let it repeat with his own children.
My bet - nothing cheaper comes along. Because Reliance's biggest competitive advantage is close links with the government, regardless of the party in power. A hypothetical competitor would find it difficult to get spectrum allocated, have trouble with land usage rights, tax issues like Vodafone had.
There is a reason foreign companies set up joint ventures with Reliance, Tata, Birla etc. Ostensibly it's because these companies "understand" the Indian market. In reality, it's because they have spent decades "lobbying" political parties and will continue doing so for several decades more. A company like Sky wouldn't know how to get started with political lobbying, wouldn't be comfortable with outright bribery, can't make a long term commitment to staying in India. So they set up Tata Sky - they supply the tech, Tata supplies the connections.
So eventually if you want to be profitable and sell more services, you have to offer a good price.
It's just the way it is. I even know people who look at fares and then decide if they want to take their own two wheeler or an Ola. Online food delivery works the same way. People hunt for deals and only order through that.
Sure some people pay for services. But those are generally rare.
Can you elaborate how did that work? I never heard about this method
So firms would advertize a missed call number on the radio.
People could give that number a missed call, and they would soon get a call back from the firm - thus never spending any money at all.
The more common interpersonal example was one person having more money than the other, or being on a company plan - so they would get missed calls from their family/friends, and they would then call back.
The cost was thus borne by the firm/richer person/person with more talk time.
Actual Example from my life: My dad had a cellular plan that had lots of free minutes of calling. So, I would just give him a missed call and he would call back. This was the early 2000s I think.
An auction exposes market pricing information which was hidden before.
In case people aren't aware, the Indian mobile sector was one of the cheapest and most pioneering markets of its time.
People created the 0 cost phone call - farmers and mobile users could give a missed call to a number they heard on the radio, and then they would get a call back.
Stuff that was in sharp contrast to the mobile plans and service packs around the world.
While people argue about data, they forget how hard it is to set up the infrastructure and the massive boost forward simple phone calls were for people.
That was the era I am talking about, not post the SC verdict.
Not sure in what way you mean pioneering but it was definitely not the cheapest! Everything cost money. Text messages, phone calls, data, roaming between states, out-of-state phone calls. Everything. All this in addition to the cost of the cell phone itself - no bundled offers with phone like AT&T did with Apple in the US.
Furthermore, you could get away with a connection from private companies like Airtel and Vodafone if you lived in a big city. Rural coverage by these players was notoriously bad. The only substitute available was the one provided by the government itself - BSNL - which got a reputation of having the "best coverage".
All that changed dramatically when Reliance came up with a Rs.500 phone which included a connection with free unlimited calls between two Reliance phones. That was the beginning of true mass adoption of cell phones in India.
> People created the 0 cost phone call - farmers and mobile users could give a missed call to a number they heard on the radio, and then they would get a call back.
This is not an example of a model working well. This is an example of a workaround to mitigate high call costs.
The 0 cost phone call is an example of the market working well - people at the bottom of the pyramid have no money to spend, and given what ARPU was, expecting even lower prices is the stuff of fantasies.
This is innovation at work. I don't know what people are expecting when what they had was already impressive for the time.
Further all 3 major firms are in massive debt, and after the SC interpretation of how they have to pay their dues, they are pretty much dead firms unless they get money.
You can already see them creating new packages to target users who have more disposable income.
I'd say make hay while the sun shines. The structure of a market dictates the strategies and tactics which work. With 3 players collusion is the norm, not competition.
If you're concerned about your privacy, it's usually known in India in the tech circles to stay away from Jio related products.
They cant be allowed to fall, because then the only name in town is reliance, which would be even worse.
What people are forgetting is that 1) Firms already raised prices and 2) that its not about data.
Its about a competitive market. We used to have this, and it even created the thriving VAS industry for a while. That died because of classic rent seeking behavior by telecoms over the VAS firms, killing that entire engine of ingenuity.
Telecom industries are know for bad results (see America, or Australia) when its not structured correctly.
Everyone who is focusing just on prices is unaware of the number of failures and missed opportunities resulting from bad telecom market structures.
Take Net neutrality, given the telcos way, it would have long been lost and rent seeking structures would have grown on top of it - it would recreate the bundled world of cable television over the net.
This means that poor users would never get a chance to look at products which compete purely on features and value - they would look at products that are "Jio Free" or "Vodafone plus", where having a hook up with the ISP is more important than features.
Looking at it in terms of "hey prices are low" is missing the great risk this industry is in.
I hope India does grow at a large enough rate for such services to be profitable.
I think their biggest advantage is their cheap (earlier free) data services.
These competitors are the same companies who had 'cartelized' the telecom industry and had refused to bring down data prices in order to ensure their profits. I wonder why questions weren't raised against TRAI back then. Once Jio entered the scene, they did bring down the prices.
A few passing birdies told me that Sundarajan was far more enthusiastic about China, then India, and that he had quite some amount of aversion to his home market.
I don't think Ambani has such an obligation.
Ambani can be dealt with a stroke of a pen when the goverment wants to. China on the other hand...
Ambani on the other hand, however powerful he may be, is certainly not a bigger threat than China. Companies being Ambani owned, while worse than a competitive market, is still much better than being Tencent owned.
But better how, exactly?
Think of it this way, why did China spin off Ant Financial out of Alibaba? Had it been in hands of foreign investors, it would be a huge issue later on if it became big. And if it became big, it would be much harder to spin it off that way. You can't spin off 100 billions and not expect strong retaliation from the countries of the foreign investors.
It was much more easier for them to control Jack Ma, and ensure he never becomes too powerful.
While India is a democracy unlike China, and the government can't just get people to disappear with nobody questioning, even without such totalitarian tools, a well functioning sovereign government is always more powerful than any of it's richest people.
If the government respects the rule of law, and doesn't do any extra judicial stuff, even then it makes sense to not let a competing foreign power like China be a stakeholder in your important companies.
If it wants to maintain the appearance of being lawful and fair, there is already an Enemy Property Act, 1968 to more or less support grabbing Chinese investments (perhaps with an amendment or two). Under what pretence would they grab Ambani's property? There is Eminent Domain in India, but only AFAIK for land ownership, and even that requires fair compensation at market prices.
> Under what pretence would they grab Ambani's property?
If there is no existing law, government can make laws. I mean the government did nationalize so many banks at once right? The government is sovereign. The amount of power it holds over it's own people, even the richest ones, is far far higher than what it holds over another strong sovereign state.
Anyways this was all about power. There are so many other reasons for ensuring someone in the country holds the wealth rather than your competitor.
No. The Enemy Property Act, 1968 is specifically made for Pakistani Nationals after the 1965 Indo-Pak War. It is not generic. To declare China as an Enemy a proper War should take place between India and China. Is China ready for such a misadventure?
a) what was Christopher Columbus looking for?
b) what was Vasco da Gama looking for?
c) what were British/Dutch/French East India Companies looking for?
d) what did Alexander's ambassador Megasthenes write about in his book Indica?
e) where is Mahabharata set? Bharat is still one of India's official names.
India has had a shared cultural history for a very long time.
That it wasn't always called India is a moot point.
What we are discussing is foreign ownership and foreign power over India, and you just said that allowing EIC too much of these was a mistake
But being a single governance group isn't the point. Being culturally similar is what defines India. And it obviously is.
Ambani is still subject to Indian laws, and even if he leaves, his wealth and empire is answerable to the Indian government.
No difference in China. Do what is good for the fatherland or your fiances, you personally and your family will suffer.
>>I don't see that the Government can deal with Ambani so easily, or even antagonise him with impunity.
So like many he's wayyy to powerful to deal with. But at least he is a local, not jeopardizing India's geopolitics. Just as he can control politicians, they can control him, if/when they want to. They know what he did to become so powerful and can send 500 police officers to his offices to search for evidence if/when...
This is speculation, unless you have sources in which case please share them.
The most detailed and seemingly authentic source  I have seen about the Galwan brawl (that resulted in the deaths of 20 Indian soldiers and an undisclosed number of Chinese soldiers) suggests the escalation was not planned but the accidental result of a chain of events starting from a freshly deployed Chinese trooper pushing the Indian party's Commanding Officer.
1. Bring new troops trained in different area(much easier to bash someone head in with a club when you were not stationed right across from him)
2. Instantly escalate by attacking enemy officer(clearly planned event)
3. Have melee weapons prepared and ready to go(clearly planned)
Indian officer and men acquitted themselves well I have to say reacting against completely unforeseen attack with their own initiative and aggression. Shutting down this play and counter attacking.
I was born in totalitarian regime so my point of view on how things work is different. Nobody in the right mind in regime like PRC will show initiative like shoving you enemies Commanding officer. It just never happens. Those guys were ordered to do it. Consequences of doing something like that to you, your family etc without an order would be extreme.
Number of killed in the end is irrelevant, it is like US counting how many vietcong they bagged, utterly pointless. Small units, ncos and officers performed very well here.
I think it was what you call reconnaissance in force. Chinese wanted to see the quality of the opposing units, cause confusion and perhaps fear. They succeeded in first, others not so much. But they are persistent and judging from satellite photos have been building up force in the are for a while. Act 2 will come, sooner or later.
It is very consistent with the "fishermen" ramming opponents ships, killing Vietnamese sailors etc. This has been MO of the PRC for a very long time.
As for the rest, I disagree with your interpretation. It can even be argued that the Indians responded disproportionately to one guy being shoved by attacking everyone in the opposing party. Anyway we can't claim both that the Chinese murdered our troops and also that we killed more than twice of theirs than they did ours (but apparently, when we kill them, it is honourable?)
The question is if Chinese ownership of Indian industries will be bad, and the answer is an obvious yes.
As for your claim in this case, it wasn't just a freshly deployed Chinese trooper, but the whole platoon, who had built structures and arranged weapons in violation of prior agreement.
Again, I've seen this pattern: Question this government and immediately be branded as a Congress/AAP/$party sympathizer. At best people ask questions like yours, and at worst they come to an agreement that you should immediately leave India and go to Pakistan. This for questioning your government.
The recent spate of investments in Reliance JIO, have been just stake purchases. He is selling stake in his company to get capital for expansion.
Ambani has signaled that he wants investment to further grow an already rapidly growing empire of media services.
A few things are very favorable to Jio
a) Due to COVID and the expectation that this pandemic and its ripple effects will be felt for a few years, there is a very high likely hood that new customers will start consuming digital media services. And that is the key. Investments in JIO reflect the fact that it is the only company that has all it's cards right to capture the new user market.
b) Also, JIO has been at the cusp of an already rapidly increasing user base, that includes a large portion of rural people. It has seen a massive growth in user base and actual users too (No one is simply taking a phone connection and keeping it. They are actually using their JIO connections to consume content)
c) And the pandemic has come at just the right time too. Old guard companies are caught on backfoot. There is tremendous good will in people for JIO. JIO reduced costs 30X for data. It was a game changer. Peoples media consumption in India exploded.
d) In addition to this, Reliance group also has its hands in the Media and Entertainment industry. Not to mention retail, FMCG, etc.
So, as on date, JIO has the following services fully available to a large and every increasing base of users, this is apart from dead cheap 4G internet connectivity on phones and dongles.
2) TV Channels
3) Retail Shopping, they recently launched a competitor to Amazon.
5) Educational content.
and a myriad more.
But here comes the best part. There are a couple of reasons India tailor made for services.
1. It has a large pre-teen, teen and young adult population, that will dominate consumer markets for at-least 5 decades.
2. It has 28 states, 122 major languages, and similar set of cultural groups. So you have ample amount of scope to localize content and have a good audience for that content.
3. Indians love to indulge in languages and cultures from other parts of India. Punjabi songs are loved all over the country. Telugu cinemas have huge markets in southern states. Tamil movies are revered all over the country. And Indians consume a lot of dubbed content. Including international ones, like Korean etc. So what this means is that media produced for one local culture / language, if received well, has a ready market all over India. This reduces risk and increases rewards.
4. Indians love to consume content. We are a noisy civilization. We consume a lot of content and want new content all the time. Movies are a huge part of the daily lives of rural villages.
5. Large number of people in rural areas have been using smartphones for the past 5 years, thanks to reducing handset costs and usage costs. They are already consuming content on the internet via Youtube, etc. They are a ready market to push content and services too.
I suspect JIO is looking for large investments to create new content for its media services and setup a distribution network for it's retail services.
Additionally, Reliance is highly respected in India. When the current CEOs father ran the company, millions of middle-class families in India bought houses, cars, got their children married, gathered retirement funds, etc riding on the sheer growth of Reliance as a company.
My father was also one of them.
Reliance is one of the companies that actually care about retail investors, at times even going to extreme measures to help them. For instance, in 1982 they took on the notorious bear cartel and even beat them:
The bear cartel was successful in bringing the share price down but Dhirubhai was smart. He realized that if this bear cartel was allowed to go on, they would have taken the share price down to wherever they wanted, and you know who would have lost? Ambani wouldn’t have lost, it’s the small investor that would have lost money and they would have lost faith in Reliance. So he said, you can’t hammer my shares
Full story/podcast here:
May I know exactly what sort of connections are we talking about it? Big business families have always had some relationship with politicians in India but they were less evident 2-3 decades back then due to then governments' incline towards socialism.
Cheap power and cooling might be a factor, but India is also building huge solar and wind capacities, and not to forget the solar alliance and cross border solar energy exchange/grid.
However you feel about how Jio got its foothold in the telecoms game ( has details), it’s sheer scale makes it an attractive investment. It’s one of two major national 4G networks and an astonishing amount of data moves through it. They’ve big ambitions on the 5G front. They’re also building India’s largest last-mile fibre network. Given that Ambani wants Jio to be debt-free by next year, and an upcoming IPO for Jio by 2024, key industry players falling over themselves to grab a pre-IPO piece isn’t surprising.
The concern, of course, is the complete lack of privacy legislation in India, and how this impacts Jio’s ambitions re “monetising” its users and their clickstream activity.
On one hand, China and nationalism are used as a tool by the Indian government (not least while the Covid-19 situation goes pear-shaped), on the other hand they are at least as dependent on US companies, if not more.
I think India should rather reflect on China's industrial strategy, including investments in infrastructure and fostering the development of national giants when India is lacking on both fronts.
I think it's much easier to make massive investments in infrastructure when you have a current account surplus. The Indian government is trying to push the industry to be more export focused but years of protectionism and import-substitution norms have made the industry less competitive.
It is not the same as nationalism and in particular for India, strong nationalism has the flip-side of igniting dormant conflicts with it sizeable muslim minority.
Also don't forget the Prussians, where Japan got it from.
Not the case if you give the comment a charitable reading.
China population https://www.populationpyramid.net/china/2020/
China will never develop a consumption based economy with its aging population. It takes Europe, decades for its population to age. It only take Japan 25 years to age like Europe and China's one child policy is not helping and its on track to age like Japan.
It's only a logical decision to go to India for its young population and most Indian speak English. If only India is more friendly to foreign business and can do what CCP did. (central planning) I think India can surpass China to became number two largest economy.
Why is that the case? I assume older people consume more than younger ones, esp healthcare
I laughed at that TED talk where the guy shows how shaking your hands can save a paper towel. We have used more paper towels in the last 1 month than I ever used in my entire 20 years of single adulthood combined.
The next 20-30 years is going to be India's peak demographic dividend phase assuming population stabilizes. While there's going to many positive developments, much of it will be squandered simply because India will take ~30 years of incremental growth to get to where China is today, unless it can execute central planning better than the CCP. Otherwise they're left with a bunch of discontent and destructive youth which is much more dangerous than China's curse of unproductive elderly. Growth will also be undermined by automation, which has eliminated entire high employment manufacturing opportunities, while increase in industrial robots is helping existing manufacturing countries retain their base, i.e. China is installing 150k industrial robots per year (3x more than 2nd place) and rapidly climbing the robots per 10k employee metric (Korean leads with 700, China 100, India 5). Further China has massive influence on where manufacturing logistics, they are in a position to pick winners and losers if they ever want to weaponize export controls. And western companies will think twice about repeating practices that allowed China to grew that big in the first place. Development is going to be spread across South Asia, ASEAN, India will not be in a place to capture as much of the pies as China did. I do think it's about time India shapes up and make an concerted effort to develop, but she has accrued so many nerfs for simply waiting too long. It's overdue, but in many ways it's already too late.
^Keep in mind development, especially for a massive potential powers like India is much more involved. There's a reason US pivoted to undermine China after Made in China 2025 was announced. These are industries essential to self-sufficiency AND climbing out of middle income trap, but simultaneously erode US/Western lead. India will face the same resistance if she ever reaches that far, otherwise all she'll ever be is farmers and widget makers. Hegemony will always cap the ambition of potential rivals. It's different for smaller countries are allowed to grow rich, often with support, because they will never be threats. It's why India & China has their own nuclear and space program. Why China expends vast resources for indigenous military. Once India grows too fast, it will be kneecapped by US and China. Like US kneecapped Japan and China. That's the way it goes.
I also saw that Foxconn is looking to build Apple products in India now too.
Publicly traded companies can't afford to play favorites, they "have to" go where the profits are and make the best of it, whether it's decades of being the mole in a wack-a-mole game with the Chinese system, or having to invest extra billions in India.
For example the largest manufacturing plant BMW has is in the US. But that's not because it's cheaper to build there, or because they want to shaft Germany. It's because they wanted access to that market in an economically and socially acceptable fashion, making them the biggest auto exporter by value in the U.S. The "socially acceptable" may not have worked since even the White House was unaware of this, presumably many Americans also.
Still after moving segments to India the next area is where? Africa is still a source of cheap labor but too many countries there suffer from stability issues. Figure within a generation it will be both viable market and manufacturing base.
That's not the main reason for moving manufacturing. You move manufacturing to exploit lower prices in the production chain (and other logistical considerations). It's why one $10 t-shirt is produced by work in 10 different countries, and why that too is constantly shifting. It's harder to "shift" a massive centralized tech industrial manufacturing system, but if the cost savings are there, you move.
I think everyone is now aware that China is finally developing a middle class and starting to clean up its rampant abuse of its environment, meaning it's going to cost more to manufacture there. Time to look for another developing nation to exploit, and India is a gigantic and attractive target with a lot of potential.
Building (and selling) cars is quite different than phones, advertising, or internet services. BMW produces mostly SUVs in its Spartanburg plant, and it sells most of those SUVs in the USA (its biggest market), so it's more profitable (tariffs, shipping, JIT, etc) to make them locally. All other BMWs in the USA are imported.
Manufacturing your tech in your biggest market (now or the future) may be unnecessary and less profitable if you can squeeze more out of the production chain in another country. China has just been so god damn cheap for so long (and so free with its loans) that it's totally fine if they aren't even one of your biggest markets. But they won't be that cheap for much longer, especially if the USG makes it harder/more expensive.
This is $10B for /digital/ services. Google dreams of being allowed into that market. The Great Firewall prevents it outright.
True to some extent only. Apart from profits, publicly traded companies also clamour for a stable business environment. And authoritarian countries have an inherent risk, due to the nature of their government and uncertainty on the world stage.
No one can make 50 year plans for China, like they can do with US, Europe or UK. It's the same case with India too.
Democracies provide an extra level of stability.
> Democracies provide an extra level of stability.
That's very true which is why I said "make the best of it" (i.e. "of a bad situation"). Companies will have to operate under different assumptions and making different plans than they would under normal conditions. Think "peace time vs. war time CEOs". But this is what makes these companies successful, the ability to juggle with unknowns, hostile conditions, uncertain future. It's a gamble but not that different from what Tesla or SpaceX did when jumping into the unknown. They're different types of unknowns but still just as risky, able to easily sink a ship.
Five years ago, I would have agreed with you about the US. But the direction that politics have gone since then makes me a lot less sure.
The rate that corruption has grown under the Trump without repercussions is absolutely astonishing. Like any relationship, I don't know how that break in trust between the government and its citizens can be repaired.
The Trump administration's "astonishing rate of corruption" you are perceiving is being massively overstated by partisan media outlets.
Previous administrations were free to engage in all manners of corruption, while the mainstream media touted their "coolness".
This is worrisome, especially if you don't think corruption is endemic of the Trump administration. New "boundaries" have been tested and set. Future administrations have a playbook that can allow them to get away with more.
If I was making that decision, it would be clearly easier to do business in India rather than China and likely far more lucrative with less concerns about property theft, censorship and the stain that human rights abuses will leave.
I don't know if you've ever tried to setup anything in China, it's not exactly a straight forward process or something you'd want to have to do often.
It doesn't look like this to me. India's population is within 50 million of China but has double the growth rate. Even if the GDP per capita (nominal or PPP) is about half of that of China, it still has a huge potential as a market and it never received enough attention. Companies are starting to see that potential now. We shouldn't anthropomorphize company decisions, they are generally purely pragmatic. There were money on the table, it doesn't imply India will be the biggest or most profitable market or production center.
While domestic consumption in big markets that demand local production will be satisfied as such (so an Indian iPhone might say "Made in India"), companies will still supply other markets with products coming from the factory that allows them the highest profits (so a US or EU iPhone will likely still say "Made in China").
> it's not exactly a straight forward process or something you'd want to have to do often.
Designing and building an iPhone are also not very straight forward but if it's profitable companies will do it. That's why so many companies still operate in China despite the chicanery.
What on earth are you talking about? India's growth rate in the past decade is nowhere comparable to China's. Even if you argue that China cooks their books, you cannot discount the volume and value of trade that China does with numerous other countries.
>it still has a huge potential as a market and it never received enough attention
India has hordes of poorly educated and poor people combined with a minuscule middle class - a definition that is expanded to include people one financial disaster away from poverty. The real market is China, not India, with its growing middle class and easy access to the full spectrum of manufacturing needs combined with a large market.
The growth rate refers to the population.
try doing that in india, good luck for stable electricity supply.
I don't agree with the CCP on many things, but China has stood up.
At this point the Chinese ascent can only be slowed down but they will only go down if they implode. Which I don't think anyone wants.
Chinese leadership priced this in years ago. If you follow ongoing political debates in China more closely they were already talking about the next 20 years being rocky as China climbs up in the world stage five to ten years ago. Why do you think China's Made in China 2025 industrial policy program was started in 2015 and OBOR in 2013?
Add to that silly power games to try and intimidate Australia(and failing) PRC strategy is very far from smart here. Perhaps it is supreme arrogance? Arrogance like that historically have led to a lot of people getting killed.
The situation with India is more complicated and there's actually no consensus inside the party. The arguments for the more assertive stance are mainly that there's right now a huge asymmetry between China and India, simply put India doesn't stand a chance in an actual conflict. The hawkish factions inside the party argue that conflict is inevitable so now is the time to clarify matters as long as China has a tactical advantage.
The jury's actually out on whether that's a smart move or not. From the perspective of the Chinese there's certainly a case to be made for it as the US is in political disarray under incompetent leadership.
India vs PRC balance is not as one sided as one might think. India has nukes just like China. On the ground PRC has advantage and probably in the air as well. But guess where all the Chinese trade routes pass by? In hot war the decisive theater would be Indian Ocean and balance of power there is very far from foregone conclusion, it would take just some US intel “leaking” for Indian Navy to shut down all PRC trade.
US is mostly non-issue, unless PRC does something idiotic like invade Senkakus or Taiwan. US will do nothing directly.
Biggest move US has done was last year when they helped push a deal to build indigenous modern submarines in Taiwan with Mitsubishi Heavy industries help. Prototype presented suspiciously looks like Soryu, which is any PRC naval planner worst nightmare. And very suspicious number of MHI “retired” engineers have moved to Taiwan. Next step after is couple of the under construction Soryu being sold. That would be like a scalpel next to PRC trade throat. Taiwan been trying to get that capability for decades, US could not help as it does not build electric subs and PRC could pressure others not to sell, well they pissed Japan enough this time(those games around Senkakus and with rare earths maybe was a bad idea eh?)
> India doesn't stand a chance in an actual conflict
If its a full blown war then may be yes. But two nuclear powers going all out and all alone will not happen so others will step in. It would complicate things for China. Ideally it should be conventional and a very short one. The rules for engagement can't be escalated, that means China has to work with severe geographic disadvantages.
In the coming decades as the rest of India gets connected to the internet, it will become the biggest market since at its current population growth it'll surpass China's population size.
"In 2018–19, the foreign direct investment (FDI) in India was $64.4 billion". Consider that there is also domestic investment, and that Google's investment is spread over many years.
How many serious start ups can be there?
There are 2 forces At play that matter to your position
1) big tech firms investing in a large local player for legal, political connections and arms length sheilding from the necessary local corruption
2) normal manufacturers moving to Vietnam - which has accelerated since the trade war due to COVID.
The second is best described by a New Zealand owner who was looking for factories to build stuff in, aside from China.
India was described as passable, if you Are an MNC. Then you can afford the workers while ensuring quality.
For anyone else, the quality of service from factories drops of fast. There simply isn’t the wherewithal in talent or experience to do manufacturing at scale and at competitive pricing for the typical firm who wants to move manufacturing hubs.
In contrast He had videos of Vietnamese factories working towards throughout targets and being a viable alternative to China.
India needs to reform Labour laws. It’s been a great hope that this govt with its monumental single mandate would have taken the issue and freed the system up so manufacturing could be unshackled.
When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
That hasn't worked out too well for them.
The reason no other country wanted to fund these projects, is because they have a history of defaulting on those loans. Additionally, these projects are a wound that doesn't stop bleeding. China has to continue pouring money in them for maintenance and upkeep too.
Unless China's goal is geopolitical neo-colonialism, I do not see any of their international infrastructure projects paying off any time soon.
Even if you don't like China, you should not pretend they are a in a weaker position than they are.
China is aging. while India have plenty of young cheap labors. its only natural for companies want India's labors and market.
Its certainly debatable whether belt and road is successfull, but I have recently recieved package from China to UK by Rail so at least some good came of it.
Also the countries China is investing in were neglected by West and wall street for decades.
The advanced economies are dependant on cheap goods, and not specifically Chinese goods. This will become more and more clear as decoupling gains pace. Corporate Japan has largely decoupled from China, with SK following close behind. US, Taiwan and European outfits are next.
China, however, is truly dependent on exports to advanced economies to sustain its economic and political model at its current stage of development. Its population is just too large.
> hindered by the large population.
This just doesn't make any sense.
Having a large population doesn't automatically result in a viable consumption based economy.
India is the world's largest democracy, has a multi-party system, has had prime ministers from different religions, and both men and women top leaders. The US on the other hand has only had Christian leaders (4 have technically not specified), and all men. It's also a 2-party system. The burden of proof here for this statement needs to be on the one claiming that US is more democratic.
The greatest challenge for the rise of India is the colonialistic mindset of many (but not all) Indians today. Hold yourselves equal and ask for you what you rightfully deserve.
Because they made the claim, and I found this claim more unconventional and potentially more interesting to draw out than the claims in the comment they replied to. There was no conscious hidden agenda here. If someone (on whatever side of this discussion) makes a novel claim, they should be expected to provide a reasonable rationale, or otherwise expect that it will be questioned or just disregarded.
See the Democracy Index, which rates the US as rather more democratic than India and has at least some semblance of a loose methodology: https://en.wikipedia.org/wiki/Democracy_Index
Will it actually be 10bn? Only time will tell...
Doing what (sales, dev, support, research)? Is this new productive activity or just outsourcing?
Why? Is this hedging the risks of China sanctions/user rejection? or the risks of Indian nationalism? or honestly wanting a more local input on the Indian market/economy? or a moral decision given China going from bad to worse? Is it just outsourcing to a low cost country? A mix of all these?
Reading the faff, it sounds like they're selling this in a similar way to Google fibre: we'll invest to inspire/shame others into doing their job and also to create a market by showing people what is available.
Interestingly I imagine 10bn USD goes a long long way in India. So this could be a huge boon for some local areas of India, so that's nice.
- 2nd most populated country on the internet
- english speaking is wide spread
- adoption towards 'an app for everything' has grown substantially in the past decade.
So far, I think Google has invested in FreshWorks and Dunzo. I don't think there was a lot of active participation so far, this might change now.
Here's the Times of India, anyway: https://economictimes.indiatimes.com/tech/internet/google-to...
IMHO, such garbage should be filtered from HN.
Use Outline: https://outline.com/zWtBay
There were couple of ministers who were part of the announcement (unlike other corporate investment announcement like that of recent FB one, where govt officials would never make an appearance); one of the ministers even extorted Google to adopt cluster of villages and make them 'Digital' ones.
This $10 Billion (!) investment is not in the same league as that of FB, Intel, Saudi investment in Reliance Jio.
'Google said its “India Digitization Fund” would be spread over five to seven years, focusing on affordable internet access, new product development tailored to Indian market needs and accelerating digital transformation, as well as healthcare, education and agriculture.
India, with its 1.3bn population, represents one of the biggest opportunities for tech companies globally after hundreds of millions of Indians started using smartphones and accessing the internet in recent years. Google Pay, the company’s digital payments service, has grown rapidly since launching in the country in 2017'.
Any predictions for the next 10 years if this will be a threat to on-shore devs considering the braindrain occurring at the direction of our president's myopic leadership and executive orders?
Also, presidential cycles are short. A four-year presidency is simply not long enough to cause massive brain drain to be a threat for anything. But if the next administration continues to be myopic, I can see that trickle of brain drain turn into a torrent.
That's exactly the point I was trying to make, that the former H-1B individuals will be hired to work at these new facilities in their homeland instead of bringing them to the bay area, as they no longer have physical working spaces here due to Covid-19 office closures and remote WFH for the foreseeable future.
Tech companies can then divest their expensive bay area real estate and shrink their HQ footprints to be a more global workforce and at the same time establish themselves in India and create custom hardware fabs away from Shenzhen and China, with lower cost savings of labor in India.
This will lower their H-1B hiring and talent acquisition costs drastically and the best and most talented H-1B's can instead work from the comfort of their home countries (e.g. India).
Reasoning bottoms-up, you are right. This will reduce Bay Area footprint, and will allow good talent to join at lower costs. Couple this with top Indian talent in US not being treated fairly (most Indian immigrants have to wait 4-5 decades before being eligible for a green card even at Google / FB / etc..). The future for the Bay Area may not be as bright as the last 15 years. I certainly hope this isn't the case since I have a vested interest in the Bay Area but I do think longer term this is going to be the outcome though.. :(
Reasoning ground-up is not the faint of hear though. Most people want to extrapolate the world from the recent past based on their personal self-serving biases.
Now let's begin with an analysis: This is the only company in their portfolio doing anything very relevant to helping India: https://ayefin.com/our-products/ The rest are profitable companies - but not like helping Indian economies or anything serving a very large amount of people. It's a micro finance model, very helpful to India (helping businessmen and farmers avoid some terrible loan sharks), however it's a business, not a charity.
Now let's talk motivations. FB recently invested in Jio, and I'm quite sure this was their most successful investment, after the 'Free Basics' idea fell through and all people protested against OTT services being subsidized and the idea of net neutrality. Now, it is well known that if you control the wire, you control the internet. You control the relevance of a website, it's advertising potential and finally, it's net revenue.
FB may have gotten some sweet insider deal from Jio, so Google may now be running helter-skelter to not become the loser in the big picture. Unless Sundar Pitchai got a boost of Indian patriotism and decided to help India, like shown in some recent movies (highly doubt it).
I mean, if they had already done something to boost small startups and create value for India, they had a 12+ year lead, lots of people - and they could have done something. But they did not. Maybe now they'll try to join forces with some telco (Airtel/Vodafone) or something, who knows.
I doubt that kind of money will ever help regular Indians become better or enhance their quality of life. Unless they turned a new leaf, let's hope so.
Businesses don't care about anything you do at home, which is most of where the culture is different.
India definitely is more of a western country when compared to China
Institutions such as civil services, education framework, public works department, court, corporate laws, penal code etc are all from the British era, carried forward post independence with minimal change if at all.
It is this bureaucratic structure that makes India work and any work needs to make it’s way through this to get implemented. Whatever politicians promise is largely irrelevant, by and large because they’ve been known to get lost in this labyrinth of bureaucracy.
The Indian version of British comedy “Yes Minister” was quite popular in India, for a good reason as Indian could relate to it .
So yes, Indian ruling structure is definitely closer to “West” than to China. But we could be more specific and say it’s close to British, because they were the ones who put it in place to begin with.
The premise of OP's argument is that India is more similar to the West than is China. The conclusion is that relative similarity will impede a future push by the West to divest from Indian manufacturing. There's a bit of a switcheroo in that argument, because the conclusion is only weakly supported by the premise. The strength of the argument depends on a comparative advantage in India-Western similarity versus Sino-Western similarity.
I don't agree that India is more of a Western country than China, apart from the influence of British rule. Think about cultural norms, religious thinking, political philosophy, racial discrimination, and women's rights in India. Would you describe these aspects of India as "Western"? China is arguably a more capitalist country than India; does that mean it is more "Western"?
Even if India were "more similar" to the West than China, it is so dissimilar from the West that it is totally within the realm of reason that the China manufacturing quagmire could be replaced by an equivalent India quagmire within a decade or two.
Both countries are faraway, populous, third-world regional powers with nuclear weapons and territorial disputes. They are more similar to each other than either of them is to the West.
There exist many third-world nations that are smaller (thus easier to influence) and closer to home (thus easier to defend in times of insecurity). If we have to invest in creating a new manufacturing hub in a place that will inevitably profit handsomely from our consumer demand, there is little sense in repeating the mistakes of the past and putting that hub in a massive Asian nation with which we have little in common.
The systems of government, economic engines, individualism vs. collectivism are all well-aligned.
Although India has the potential to be a threat, so far it hasn't been and the more the US can invest in India and 'own' large swathes of key industries the better for the US but someday India may wake up to the fact that their economy is, or can be, larger than the US's and start acting accordingly.
It's a bait and switch. Get foreign investors to build companies in your country. Let them pay for training. Children can now go to school and university. They become adults and gain experience during their job. They now want to leave the country for higher incomes (jackpot). Then finally give them a reason to stay. The Chinese government has amassed an insane amount of money and growth during their business friendly periods and is now able to deploy it for protectionist measures.
The reason why protectionism is a bad idea is that it's commonly used in incompetent governments that are prone to corruption before the country is ready. They instate the protectionism before the country has formed a competitive industry. The end result is that consumers have to pay hefty tariffs on foreign products that are almost impossible to replicate domestically like GPUs or CPUs. Alternatively consumers are stuck with inferior domestic products because there is no reason for the domestic monopoly to improve without competition.
Saying this, you need to mention just how fast they burn that money.
I once did a contract for a company that participated in a $1.9B OBOR project, where $600M managed to vanish into thin air, $150M was outright stolen, and the remaining $1B never materialised.
The procurator office of the country managed so far to recover $460M from all over the world from the missing $600M.
The most shocking out of the whole story was how the Chinese side reacted. Their stance was like "You "lost" $600M, and so what? We have more"....
Mind you they are making a profit, not running a charity
Nothing is black and white.
Domestic markets were kept relatively closed in order to foster development of local industry and companies.
Even without their will to control information for political purposes they would have not allowed such a key industry to be controlled by foreign players, and they have a strategy of creating a strong national industry in all sectors.
Is it simply that The Coca Cola Company and PepsiCo have better lobbying than Google/Amazon?
India's present economic strengths and growth opportunities are in its ability to carry out work in the English language and IT sector for a wealthier multinational market: it's not a good bet especially not in the short run to sacrifice those opportunities to try to get Indians to mainly use Indian manufactures. Which is also why you have Google India and Amazon India. China didn't really have that same level of opportunity even if they'd pursued complete economic openness that's entirely alien to their political culture. And most countries smaller than China have been highly selective about which industries and resources they protect and for good reason.
India's governance is a derivative of UK, so most likely just like UK with a 20 times bigger market.