Context: Google CEO Sundar Pichai on Monday announced an investment of Rs 75,000 crore in India over the next 5-7 years through 'Google for India Digitisation Fund'. Addressing Google for India event, Pichai asserted that the latest move is a reflecion of the company's confidence in future of India and its digital economy. Investments will focus on four key areas of India's digitisation. 
This includes, enabling affordable access and information to every Indian in their own language, building new products and services relevant to India's unique needs, empowering businesses as they continue to embark in digital transformation, and leveraging technology and Artificial Intelligence for social good in areas like healthcare, education and agriculture. Meanwhile, Reuters quoting sources said Foxconn plans to invest up to $1 billion to expand a factory in southern India where the Taiwanese contract manufacturer assembles Apple iPhones.  

Why Digital Services has become crucial today?
Multi-sectoral utility: Digital services enable access to and delivery of a wide array of products across multiple sectors, from healthcare to retail distribution to financial services.
Critical for growth: Digital Services have become critical to every 21st century economy given that the world is at the doorstep of fourth Industrial revolution.
Resisting the negative trends: Even in the midst of the COVID-19 pandemic, investments in digital services continue to flow at record levels globally, outpacing investment in nearly every other sector. 
Helpful during Emergencies: Digital services are filling gaps when national or global emergencies interrupt more traditional modes of commerce. Ex: Telemedicine during COVID-19 lockdown.
Opportunity for India: India is an ideal destination for increased FDI flow because of its huge and increasingly digitised population along with good start-up ecosystem.

What are the challenges in India that prevent full exploitation of its potential in digital services?
Along with need for bridging digital divide & improving digital infrastructure, below are some of the areas which need attention from government.Three pending measures in digital services

1. The Personal Data Protection Bill (PDPB)
2. The e-commerce policy
3. The Information Technology Act Amendments

Contesting approaches & goals

• Approaches in the above regulatory reform seem to emphasise on protecting the domestic market for domestic companies and prioritising government access to data
• It may be difficult to reconcile these approaches with India’s strong interest in promoting data privacy, protecting its democratic institutions, and encouraging FDI. 

Challenges in Indo-US bilateral relationship

• India and the U.S. are yet to conclude negotiation on a bilateral trade agreement that could address some digital services issues
• U.S. has initiated a Section 301 review of whether digital services taxes like India’s equalisation levy constitute “unfair” trade measures.
• Strong relationship with US is an important factor in realising the potential for greater trade and investment in digital services. 

Road Ahead

• India needs to attract FDI and address the obstacles preventing the growth of digital services, so as to achieve the goal of becoming a $5 trillion economy
• India’s digital economy will touch $1 trillion by the year 2022. India would be $10 trillion economy by 2030 and half of it would be the digital economy.
• Entry level smartphones have limited capabilities for smooth internet access, and the outreach of the ‘smartphones’ is limited.
• There is an absence of enough skilled manpower in digital technology.
• Lack of user education and there are limited facilities to train personnel. India needs over one million cybersecurity experts to check and monitor the growing menace of digital crime.
• Even our PM stating that “skill, re-skill, and up skill” is the mantra to stay relevant in the rapidly changing business environment and market conditions?.