Google India revenue grew 35% to Rs 5,594 crore in FY20, profit rose 24%

Google India Private Limited, the Indian arm of the tech giant that gets most of its revenue from paid advertising, reported Rs 5,594 crore in revenues for 2019-20. This was 35 per cent higher than the previous year, show regulatory documents sourced from business intelligence platform Tofler.

The company also reported a net profit of Rs 586 crore during the financial year, up 24 per cent from a year earlier. The company’s total expenses in 2019-20 were Rs 4,455 crore. Advertising revenue contributed about 27 per cent to the company's turnover. The share of IT-enabled services stood at 32 per cent, and that of IT services was at 41 per cent.

The company has granted loans worth Rs 190 crore to Google Connect Services India Pvt Ltd during the year under review.

According to the documents, the total dues related to income tax on account of dispute for assessment years from 2006-07 to 2016-2017 stood at Rs 6,127 crore, of which Rs 1952.7 crore was paid under protest. The forums where these disputes are pending include the Supreme Court, high courts and the Income Tax Appellate Tribunal (ITAT). Also, the amount of dispute related to service tax and penalty was Rs 512.2 crore for various periods from FY05 to FY15, of which Rs 20.2 crore was paid under protest. Again, this dispute is pending at the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

India’s digital transformation opportunity and anticipated 850 million smartphone users by 2025 have made the country a very attractive market for big tech companies like Facebook, Amazon and Google. The market opportunities for online commerce in the country are expected to touch $200 billion by 2028 from $30 billion in 2018. Also, due to the Covid-19 pandemic, more Indians are getting online. These transformations are also generating huge amounts of data.

Recently, a joint parliament committee (JPC) looking into the Personal Data Protection Bill, 2019, examined the stakeholders including Amazon, Facebook and Google to get their perspective about personal data protection issues. These big service providers are data intermediaries and are dealing, handling and processing humongous volumes of data. According to sources, Google was asked about the company’s different businesses in India and quizzed on the revenue it makes and the taxes it pays in the country, besides where it stores users’ personal data.

In July this year, Google said it would invest close to $10 billion (around Rs 75,000 crore) in India over the next five to seven years through a ‘Google for India Digitisation Fund’. It would do it through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments.

Sundar Pichai, chief executive officer of Alphabet Inc and its subsidiary Google, had said the firm was committed to empowering small businesses and building products suited to the country’s needs. “This is a reflection of our confidence in the future of India and its digital economy,” Pichai had said.

The ‘Google for India Digitization Fund’ will enable affordable access and information for Indians in languages like Hindi, Tamil and Punjabi. The fund will also be utilised for empowering businesses in digital transformation and leveraging technology and artificial intelligence (AI) in areas like health, education, and agriculture.

The same month, Reliance Industries Chairman Mukesh Ambani announced a strategic partnership with Google and development of in-house 5G solutions. The aim is to win over new customers and create a platform for future growth. Google will invest Rs 33,737 crore for a 7.73 per cent stake in Jio Platforms. The two companies will collaborate for the development of entry-level affordable 4G and 5G smartphones, as well as Android-based operating systems. The investment of $4.5 billion in Jio was the first — and the biggest — that the company will make through its $10-billion India digitisation fund.

In September, Google India unveiled a new multi-pronged effort to help small and medium businesses navigate the challenging economic environment and adapt to the new digital-first consumer behaviour. Building on its effort to help consumers discover small businesses on Google search and maps, the initiative focuses on accelerating the efforts to help businesses build digital presence in partnership with Zoho and Instamojo. Google has also partnered with Dunzo and Swiggy to fast-track the on-boarding process, with both partners committing to provide additional support to small businesses to start accepting orders online and enable delivery logistics.