Facebook and Reliance Jio deal, will it help boost the economy(?)

Year 2020 marked as a year of tragic and uncertainty. Pandemic of Covid-19 has hit the world economy and many countries economic backbone has been push to the bottom. Amid the lockdown, The Indian economy witnessed a positive wave as Reliance Jio and Facebook has came together for a joint deal agreement in the sector of Telecom and Technology Infrastructure. Facebook invested nearly about 5.7 Billion dollar or Rs. 43,574 Crore in Jio Platform which is around 9.99% stake in oil-to-retail conglomerate. That deal value Reliance operation around $ 66 Billion. In the month of Aug 2020, while addressing to its stake holders Reliance CEO Mukesh Ambani clearly mentioned that they were planning to became a debt free company in upcoming years. This deal seems to be one of those steps which will ensure Reliance deadly sure towards becoming debt free company. Not only Facebook but reliance also manages to grab some of big foreign investments in Digital platform Jio which includes silver lake, intel, Google, Qualcomm and many more. This deal can turn out to be a game changer for Facebook and also an Indian economy. How? Let's talk in brief.

Will it be a Game Changer???

Facebook has been one of those company which witness maximum number of daily users after Google. Facebook has made multiple attempts to enter into Indian Subcontinent but has not manage to capitalize its opportunities. In the year 2015, Facebook has tried to get its fingers into internet pie through its experiments of basic free internet services as a partnership with service providers. Since then Facebook has been waiting eagerly to enter into Indian internet market. The deal with Jio will actually help Facebook to mark its foot in the pool of Indian subcontinent market. But how exactly this deal will help the Indian economy is a big question yet to answer. SO moving forward, first we have to examine carefully what is the current situation is all about. In the year 2016, Reliance played a master stroke by launching Jio and capture half of the telecom market. It currently has 338 billion active customers. But this is just a half of the scenario. The situation of pandemic has made the people see some worst time and activity in the border in the china, Pakistan and India has made the government to take some of important steps towards self-realization which made government introduced ‘Vocal for Local” scheme which will promote more of Indian made good and Indian originated companies. This is where Reliance Jio will come into picture.

New Normal for Indian Economy

The first important thing is to understand is that Jio is planning to become as India’s one of the most valuable company. In the recent AGM meeting, CEO of Reliance Mukesh Ambani quoted that “Data is a New Oil” through which he indirectly stated that they are planning to enter into AI, Automation and cloud computing. Now it is very much important to understand and connect all the dots before we talk any further about what is happening. Secondly, Jio has been continuously grabbing investment from companies like Silver lake from E comer and retail, Qualcomm and Intel for 5G technology and Google and Facebook for AI and cloud Computing. It is very much important for us to understand that for creating a easy and fast environment for automation (Cloud Computing) the advance technology of 5G is very much important and Reliance has smartly grabs foreign investment attention which made Qualcomm and Intel to Jio. Also Reliance has an investment deal with silver lake to advance its E-commerce and retail segment which down the line somewhere contribute in automation and AI. Also, the deal with google will help Jio develop and move towards cloud computing. So, to talk in brief Jio is creating an eco-system where every company is investing in Jio in somewhat related each other, and Facebook being the highest investor in Jio will enjoy the largest piece of pie among all. But the question still arising here is that how these things are going to boost the Indian economy.

Road Ahead:

In the latest news, It was clearly found that during the festival of Diwali and Navratri, the use of China product reduced to around 70%, which clearly indicate that the government for bod for “Vocal for Local” has somewhere started to work. Reliance being one of the big player in Indian economy and in Telecom sector has clear and cut chance to advance itself through this foggy situation. The deal with Facebook as not only brought foreign investment into India but also it also ensures that India is going to be one of those economy which is going to boom in upcoming future. Clearly Facebook will help Jio to advance the technology in Automation, Bog Data and AI and Reliance being the biggest player in India will help the economy boom as Reliance booms. So to make it clear any investment and growth in reliance will ensure or indirectly indicate growth of the economy. As quoted by Analyst in the stock market, Reliance is not just a company, It is a backbone of Indian Economy. But there is also a bone in the fish, Facebook investment in Jio means access to India’s large chunk of data and Facebook reputation in the past has not been good in terms of data security. This arises an important question of data localization which is one of the big concerns of Indian government in present. So it will be a big question on reliance that how they are going to ensure data localization. Amid Facebook being the part of investment.

So, to answer the question definitely the deal between Facebook and Jio will help Indian economy to boost as mention the reasons are simple.

First, it is going to bring Rs.43,574 crore in India. Second, company like Facebook will help Reliance to grow in terms of technology and also somewhat will help in economy. Third, when there is huge inflow of foreign investment in any economy, some other factor also influencing the economy like GDP, Per capita income, Trade, Employment Rate and also advancement in complementary technology. To conclude, every coin has two faces, so does this deal has. Of course there are positivity which is going to help the economy but there are other factors which need to be monitored carefully because this factor will definitely harm the economy in long run.