Amazon Makes Bold 26 Trillion KRW Investment in India

by Jo Youjin

Published 18 May.2023 16:29(KST)

Amazon's key growth driver, Amazon Web Services (AWS), is making a new investment worth 26 trillion won in India.

According to major foreign media on the 18th (local time), AWS announced that it plans to invest 1.06 trillion rupees (approximately 26 trillion won) in India by 2030 to expand its cloud infrastructure. Amazon stated in a press release that this investment will create more than 100,000 full-time jobs annually.

AWS currently operates two data centers in Mumbai and Hyderabad, India. Foreign media reported that this new investment is aimed at meeting the increasing demand amid a series of new cloud-based service launches such as artificial intelligence and storage.

The Indian government is reportedly pushing regulations requiring global tech companies to operate data servers domestically rather than overseas, which is expected to lead to more entries by competitors like Microsoft and Google into the Indian market.

According to market research firm IDC, India's cloud computing market is projected to reach $13 billion by 2026.

There is also analysis that Amazon's expanded investment in India is related to the China Plus One strategy, where global tech companies add production bases and sales markets outside of China.

Sri Perumbudur, a large industrial complex located in Tamil Nadu in southern India, is a production base for global IT companies and manufacturers such as Apple, Samsung Electronics, and Hyundai Motor, and is either already entered or preparing to enter the market.

Previously, global companies such as Foxconn, Apple's largest partner, and Cisco, a U.S. network equipment company, announced plans to newly enter or expand their investment scale in the Indian market to diversify their supply chains. Cisco announced earlier this month that a new manufacturing facility in India will begin operations, and Foxconn plans to invest $500 million in India.

Amazon holds an overwhelming global No. 1 position in the cloud computing sector. AWS, Amazon's cash cow and main revenue source, saw its first-quarter sales grow 15.8% year-on-year.