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| Indian firms created 60,000 jobs in US |
| Press Trust Of India / Washington Jun 17, 2010, 00:57 IST |
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Although India has become synonymous with outsourcing, Indian companies created nearly 60,000 jobs in the US between 2004-09 through nearly 500 investment and acquisition deals worth $26.5 billion.
This fact was highlighted in a report, ‘How America Benefits from Economic Engagement with India,’ released by influential Congressman Jim McDermott in the presence of India’s Deputy Ambassador to the US Arun Singh. The study comes on the heels of US President Barack Obama ending tax incentives to US companies that move jobs outside the country. Instead, his government would route the incentives to those creating jobs inside the US, he had said last year. “We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits,” Obama had said.
The report released yesterday investigates one specific aspect of globalisation of the American economy, namely, the United States-India business relationship. During 2004-2009, 90 Indian companies made 127 greenfield investments worth $5.5 billion, and created 16,576 jobs in the US. Greenfield investments are investments made to start a new venture by constructing new operational facilities from the ground up. The top three destination states for greenfield investments were Minnesota, Virginia and Texas, in that order.
It is noteworthy that the software and IT services sector, which account for bulk of the outsourcing deals, received less than 15 per cent of the total investment. The investments mainly were in mining, manufacturing, and other industries, the report said. The top three states in terms of jobs created were Ohio, Texas, and California, the report said. During 2004-09, 239 Indian companies made 372 acquisitions in the United States. The five US industrial sectors that received the most greenfield investment were Metals; Software & IT Services; Leisure & Entertainment; industrial machinery, equipment & tools; and financial services, accounting for almost 80 per cent of total greenfield investment in the US.
The report, jointly produced by University of Maryland, India-US World Affairs Institute and Federation of Indian Chambers of Commerce and Industry, gives a comprehensive analysis of America’s economic engagement with India during the period 2004 to 2009. A 2004 Goldman Sachs report had forecast that nearly six million US jobs would be shifted overseas to low-wage countries like India.
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