Facebook has had a messy history in India. In 2013, it established Internet.org, which aimed to offer free internet to millions in India at the cost of heavily restricting access to the internet. The company came under criticism for violating net neutrality, and in 2016, Facebook withdrew the platform from India after regulators rejected the project.
Facebook has not given up on India, though. It recently invested around US$15 million each in social commerce company Meesho and edtech startup Unacademy. It is also fighting off TikTok, which is expected to amass 350 million users in India by the end of 2020. Finally last month, Facebook agreed to invest US$5.7 billion for a 9.99% stake in Mumbai-based Jio Platforms, the largest foreign direct investment in Indian tech ever.
Jio Platforms is a three-year-old subsidiary of India’s highest valued company, Reliance Industries. The company includes the music streaming service JioSaavn, video streaming service JioCinema, smartphones, broadband, payments, and holds investments in Jio Infocomm, the world’s third-largest mobile network operator.
Jio’s last reported user count amounted to 388 million, whereas Facebook has 700 million of its own users in India. Industry observers have said Mukesh Ambani, the chairman of Reliance Industries and now Asia’s richest man, wants Jio to be known worldwide as a digital services platform like Google or Alibaba.
One collaboration the two companies will get going with is between JioMart, a joint-venture e-commerce business with India’s largest retail chain, and Facebook’s WhatsApp. Users will be able to order items from local shops in WhatsApp via JioMart.
Many see the move as Facebook becoming a competing payments business with Google Pay, Alibaba, and others. However, Facebook India’s Vice President and Managing Director has said it “is only meant to fuel the small business side of the economy.”
Many others have pointed to the fact that the two companies are behind two of the highest-profile blockchain projects. Reliance Jio last year announced plans to build the world’s largest blockchain network within 12 months, with tens of thousands of nodes planned to be operational from day one. At the time, Mukesh Ambani said:
“Using blockchain, we can deliver unprecedented security, trust, automation, and efficiency to almost any type of transaction. And using blockchain, we also have an opportunity to invent a brand-new model for data privacy where Indian data, especially customer data is owned and controlled through technology by the Indian people and not by corporates, especially global corporations.”
Facebook’s Libra, now several digital currencies each representing a different fiat currency, is probably the world’s most well-known blockchain project. This year, the doors opened for the currency to operate in India. In March, the Supreme Court of India overturned a ban imposed by the Reserve Bank of India (RBI) on cryptocurrency payments. Facebook had previously announced Libra would stay out of India, but that was in light of the pending Supreme Court case.
Evidence shows that India could be a suitable market for Libra. A poll this year by British market researchers Ipsos MORI and economic policy think tank the Official Monetary and Financial Institutions Forum (OMFIF) showed India has one of the highest approvals of digital currencies, much higher than Western countries.
What difference might the Facebook and Jio partnership make to their blockchain projects? The two ambitious plans could leverage each other’s userbases to jumpstart their products. Partnering with Ambani’s empire could also prove helpful for lobbying Facebook’s interests in the country. In addition to the public perception of digital currencies, Prime Minister Narendra Modi’s demonetisation policies could act as a gateway to an Indian rupee-backed Libra.
But Namrata Shukla of AMBCrypto, a cryptocurrency publication, is not enthusiastic about the speculation. Shukla points out that Jio Infocomm has not yet declared their position on digital currencies. Moreover, Shukla believes the RBI would not take kindly to Libra and would challenge it in court or lobby bills in parliament to curtail digital currencies (parliament already has one anti-cryptocurrency bill pending review).
We will have to wait till later this year to see if Jio’s blockchain emerges as planned. As for Facebook, despite the acceptance of digital currencies at home, Indian authorities could end up waiting for other countries to adopt Libra before following suit. Nonetheless, for now, two of the world’s biggest tech giants still have the exciting opportunity ahead of finally deploying blockchain-backed technologies to hundreds of millions of people.