Google IME is a set of typing tools (input method editors) by Google for 22 languages, including Amharic, Arabic, Bengali, Chinese, Greek, Gujarati, Hindi, Japanese, Kannada, Malayalam, Marathi, Nepali, Persian, Punjabi, Russian, Sanskrit, Serbian, Tamil, Telugu, Tigrinya, and Urdu. It is a virtual keyboard that allows users to type in their local language text directly in any application without the hassle of copying and pasting.
Google's service for Indic languages was previously available as an online text editor, named Google Indic Transliteration. Other language transliteration capabilities were added (beyond just Indic languages) and it was renamed simply Google transliteration. Later on, because of its steady rise in popularity, it was released as Google Transliteration IME for offline use in December 2009.
It works on a dictionary-based phonetic transliteration approach, which means that whatever you type in Latin characters, it matches the characters with its dictionary and transliterates them. It also gives suggestions for matching words.