Earlier this week, social networking giant Facebook (NASDAQ:FB) announced a massive $5.7 billion investment in Jio Platforms. Jio is a subsidiary of Reliance Industries, a multinational conglomerate that also has subsidiaries in retail, telecommunications, petrochemicals, textiles, and more. Of course, Facebook is primarily interested in booming internet adoption within the world's second-most-populous country, and the company notes that Jio has helped bring nearly 400 million people online in recent years.

The investment will give Facebook a stake of just under 10%, making it Jio's largest minority shareholder.

Indian people using smartphones

Image source: Getty Images.

India is WhatsApp's biggest market

The money will help beef up Reliance's balance sheet, as the company has loaded up on debt in recent years in order to build out telecommunications infrastructure. Reliance is hoping to extinguish all net debt by March 2021.

Facebook says its goal is to help businesses, including the 60 million small businesses in India, explore new opportunities. The company will collaborate with Jio to help accelerate the adoption of the digital economy. For example, Facebook and Jio will integrate WhatsApp with JioMart, a local e-commerce platform that is trying to compete with Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT).

Both Amazon and Walmart have been aggressively expanding in India. Amazon announced in January that it was investing $1 billion in India, and Walmart made an enormous $16 billion investment in India's Flipkart a couple years ago.

WhatsApp is wildly popular in India. In fact, India is WhatsApp's biggest market, with over 400 million monthly active users. That means nearly a third of India's 1.3 billion people are on the messaging service, and that India represents about a fifth of WhatsApp's total 2 billion users. Integrating with WhatsApp could give JioMart a huge advantage over rivals.

More than Oculus and Instagram combined

The news also comes years after Facebook received widespread criticism around its Free Basics program, which offered free access to bare-bones internet services in developing markets like India. Critics argued that Free Basics was essentially "digital colonialism," pushing users into Facebook's ecosystem. India banned the service in 2016.

The investment is among the biggest deals Facebook has ever done, second only to the $21 billion acquisition of WhatsApp. At $5.7 billion, the Jio deal is far more than what Facebook spent on Oculus ($2 billion) and Instagram ($715 million) combined.

The company noted in its most recent annual report that India was one of its "key sources" of user growth in 2019, along with Indonesia and the Philippines. In its never-ending quest for more users, Facebook is making a huge bet that it can make itself indispensable for social networking, communication, and local e-commerce.