Google CEO Sundar Pichai announced plans to open a global fintech operations centre in Gujarat’s GIFT city during Prime Minister Narendra Modi’s visit to the US. He said the move will “cement” and “build” on India’s fintech leadership - founded on the United Payments Interface (UPI) and Aadhar ID system - and “take it globally”.
What exactly will the fintech operations centre entail?
The operations centre will house employees working on specialised operations supporting Google Pay (GPay), which accounted for almost 35 percent of the total Unified Payments Interface (UPI) transactions by volume and 34 percent by value in May 2023, behind Walmart backed PhonePe, which accounted for 47 percent of total UPI transactions by volume and 50 percent by value. It will also be home to teams working on other product operations at Google.
While Google did not let in on how much employment this will generate, a spokesperson told Forbes India in a statement, "This will support small and large businesses in India, the US and around the world.”
Why did Google choose India for this hub?
First, India is a key overseas market for Google. Already, GPay has cemented its position in India’s UPI landscape. Establishing its operations at GIFT city will likely propel GPay’s progress in Southeast Asia and beyond.
Second, India is home to massive pool of high-quality engineering talent. That would have played a part in Google’s decision to set shop in the country.
Third, the so-called India stack comprising government backed APIs upon which private companies – like Google–can build software with access to government IDs (Aadhaar), payment networks (UPI) and data is ripe ground for innovation. This interoperable digital infrastructure allows companies can build apps providing consumers with everything from loans to welfare payments. Google aims to harness the power of this foundational India stack and further build on it. Pichai said it was “exciting” to see the progress India had made, particularly around the vision of Digital India. “PM Modi’s vision for Digital India was ahead of its time. I now see it as a blueprint for other countries.”
Fourth, Google is committed to investing in India—something Pichai highlighted when he last visited India in December 2022. At the time he said the tech giant will invest $10 billion (approximately Rs.75,000 crores) in the country over the next five to seven years; already much progress has been made on that front, said Pichai after meeting Modi earlier this week, especially in companies working in Artificial Intelligence (AI). Besides, Google, which has been operating in India since 2004, has put enabling Internet access to a billion people at the heart of its India’s strategy through affordable devices, Indian language capabilities, and using AI and machine learning (ML) for developing solutions in the areas of healthcare, skill development and agriculture.
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What does the move mean for India?
According to Tapan Ray, managing director and group CEO of GIFT city, the move is a testament to “India’s growing prominence in the fintech landscape.”
The move will also go “a long way” in realising PM Modi’s vision of making GIFT City “a truly global fintech hub,” Ray said. Set in Gandhinagar, GIFT or the Gujarat International Finance Tec-City, is fast evolving into a global financial centre much like New York, London or Singapore. It is home 23 multi-national banks including HSBC, JP Morgan and Barclays; 35 fintech entities; two international stock exchanges with average daily trading volumes of $30.6 billion; as well as India’s first bullion exchange with 75 onboarded jewellers.
According to the ministry of external affairs, PM Modi invited Pichai to explore further collaboration in the areas of AI, cybersecurity products and services, as well as mobile device manufacturing in India. They also discussed collaborations between the tech major and India’s academic institutions to promote R&D and skill development.