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Photo: Sajjad Hussain/AFP/Getty Images

As tensions with China grow deeper, media giants could look to further ties in India, where the mobile economy is booming.

Why it matters: India is one of the fastest-growing internet markets in the world. But few consumers have the disposable income to pay for multiple services, which will make it hard for some companies to conquer the country.

Background: Like many developing countries, India is mostly a mobile-only internet economy.

By the numbers: Unlike the largely saturated North American digital market, India's still has room to grow.

Expand chart
Adapted from eMarketer; Chart: Axios Visuals

Internet adoption is driving unprecedented advertising growth in India, as many consumers are more comfortable with paying for content via data-based ads.

  • India will be the third-biggest contributor to ad spend growth globally between 2018 and 2021, according to a new report from global media agency Zenith.

The media scramble: Western tech and media companies have been expanding their presence in India to take advantage of and cover the growing economy.

  • News companies, like the Wall Street Journal, the New York Times and NPR have expanded staff or products in India over the past few years to cover the growth story.
  • Tech companies like Google and Facebook, that serve as big distributors of information in India, have pushed to expand internet access in the region to increase the internet population. Google launched its "The next billion users" plan to conquer India last year. Facebook's "Free Basics" program was rejected by regulators in 2015.
  • From a social media perspective, Google is now looking to take on Facebook's social media and messaging dominance in India with a new hyper-local social network called Neighbourly, Amazon officially rolled out its social e-commerce site Spark, in India last week.

Major streamers are also looking to conquer the territory. India will remain the fastest-growing video market, per Media Partners Asia.

  • Netflix, which has been in India since 2016, scored big last summer with its massive hit "Sacred Games," its first piece of Indian original content with a mix of Hindi and English. Netflix has said it would consider cheaper pricing tiers to lure more subscriptions in India.
  • Amazon, meanwhile "has no fewer than 30 Indian originals in different stages of production and recently developed a dedicated Hindi-language version of its platform for India," according to the Hollywood Reporter.
  • Spotify, a Swedish company, is expected to launch in India within the next 6 months, per Bloomberg's Lucas Shaw. But it may face challenges: "Streaming services have about 100 million users in India, but a tiny fraction pay for the services."
  • YouTube, as Shaw notes, is the "most popular online music source in the country," in part because it's free. It's grown so big that one of India’s largest record labels is expected to surpass the most-subscribed-to YouTube channel in the world, PewDiePie, which has held the top spot for the past five years.

Between the lines: Compared to China, India is a much more lenient entry-point from a regulatory perspective. Recent trade tensions between China and the U.S. have helped strengthen the trade relationship between China and India. That could be driving India to start erecting new barriers to U.S. companies.

  • "As for protectionist policies, we have taken much relaxed approach than China," says Manish Singh, a tech reporter in New Delhi who contributes to CNBC and VentureBeat. "It was only recently that the Indian government began to think about things like having Silicon Valley companies store specific data such as payment transaction info in locally stored servers," says Singh.

India's slow middle class growth means fewer internet users are willing to pay for subscription services. Language and cultural differences can also be a challenge.

  • Cash payments have been used by Indian internet upstarts to drive transactions, says Agrawal. For example, Flipkart (India's Amazon equivalent) and Ola (India's Uber equivalent) accept cash payments upon delivery or a completed transaction.
  • "Indians don't trust credit cards and generally don't like to pay online. There's a local distrust of digital commerce — for now at least. Western players need to be aware of it," says Agrawal.
  • Language barriers also presented a barrier to digital growth in India, which hosts hundreds of dialects and over 20 official languages. Today, voice technologies and artificial intelligence help bring down those barriers to entry, though there are still difficulties with content production.

Be smart: Western companies already have big stakes in the Indian market. Twenty-first Century Fox-owned TV streaming company Hotstar is by far the biggest over-the-top TV provider in India with roughly 100 million subscribers, followed by Voot, which is jointly-owned by Viacom and Mumbai's TV18.

Go deeper

By the numbers: Where the earmarks are wanted

Expand chart
Data: House Committee on Appropriations; Chart: Danielle Alberti/Axios

The Dallas-Fort Worth area is being targeted for the largest collective earmark request in the country, according to a detailed breakdown of overall requests released by the House Appropriations Committee.

Why it matters: House appropriators are trying to balance bipartisan momentum for infrastructure investment with "pork-barrel" spending's checkered political history. The data dump is an effort to provide transparency for what are now termed "community project funding" requests.

Democrats open to user fees for infrastructure deal

President Biden sits Thursday with Sen. Shelley Moore Capito (R-W.Va.) as they discuss his $2.3 trillion infrastructure proposal. Photo: T.J. Kirkpatrick/The New York Times/Bloomberg via Getty Images

Some Senate Democrats are open to paying for a compromise infrastructure package by imposing user fees, including increasing the gas tax and raising money from electric car drivers through a vehicle-miles-traveled charge.

Why it matters: By inching toward the Republican position on pay-fors, some Democrats are bucking President Biden's push to offset his proposed $2.3 trillion plan by focusing only on raising taxes on corporations and the wealthy.

Progressive legal advocacy group spinning off from sponsor

Illustration: Annelise Capossela/Axios

A leading progressive legal advocacy group is spinning off from the sprawling dark money network that seeded it, the group tells Axios.

Why it matters: Demand Justice's decision to separate from the Sixteen Thirty Fund, a "fiscal sponsor" for scores of largely left-wing organizations, will provide the public with its first detailed look behind the curtain of the influential progressive nonprofit.