AWS to invest $12.7 billion in India

Amazon plans to invest $12.7 billion into its cloud business in India by 2030, the e-commerce group said Thursday, as it pushes ahead to scale up the AWS infrastructure in the key overseas market at a time when it has pared back several other services in the region.

The U.S. giant, which earlier invested $3.7 billion on AWS infra in India and currently maintains two data center regions in the South Asian market, said its spendings will support 131,700 full-time jobs across roles such as engineering, telecommunications and construction.

Thursday's announcement is a noteworthy escalation in AWS' strategy. The cloud giant had earlier said that it will invest $4.4 billion on AWS in the South Asian economy.

India, the world's second largest internet market, has witnessed a considerable surge in cloud adoption across various industries in recent years, reflecting the sector's robust growth. Amazon's cloud division holds a dominant position within the market, boasting a roster of prominent customers such as the Indian Ministry of Electronics and Information Technology, Axis Bank, HDFC Life, BankBazaar, Niti Aayog, Physics Wallah and Acko.

Google, which also has two cloud regions in India, and Microsoft, which maintains three, have also expanded their cloud businesses in the country in recent years. The overall India public cloud services market is expected to reach $13 billion by 2026, according to researcher IDC.

“AWS is committed to driving positive social and economic impact in India. In addition to building cloud infrastructure and helping local customers and partners digitally transform, we have trained more than four million people in India with cloud skills since 2017, and invested in six utility-scale renewable energy projects to meet our global 100% renewable energy goal by 2025," said Puneet Chandok, president of commercial business at AWS India and South Asia, in a statement.

The planned AWS investment will help create "more beneficial ripple effects, supporting India on its path to becoming a global digital powerhouse," he added.

India is a key overseas market for Amazon, where it has poured over $6.5 billion in the country’s e-commerce in the past decade. The tripling down of AWS investment also surpasses the company's spendings in -- and commitments to -- its marquee e-commerce business.

The announcement also arrives amidst Amazon closing numerous businesses in India, a move that prompted several analysts to question whether the American giant was scaling back its presence in the country. Walmart, Amazon's global rival, has also spent over $2.5 billion in India this year.

“PM Narendra Modi's Digital India vision is driving expansion of cloud & data centers in India,” said Rajeev Chandrasekhar, minister of state for electronics and information technology, skill development and entrepreneurship in India, in a statement.

“India cloud and the underlying data center infrastructure are important elements of India's digital infrastructure and ecosystem. I welcome the Amazon Web Services investment of $12.7 billion to expand their data centers in India. It will certainly catalyze India’s digital economy. MeitY is also working on a Cloud & Data Center Policy to catalyze innovation, sustainability, and growth of India cloud.”