Author: Lalit K Jha
Publication: Rediff.com
Date: December 31, 2010
URL: http://www.rediff.com/business/slide-show/slide-show-1-india-net-job-creator-for-us-cos-not-other-way-round/20101231.htm
India is a net job creator for US companies,
not the other way around, National Association of Software and Service Companies
chief Som Mittal said on Friday strongly refuting the public perception in
Washington that outsourcing and free trade agreements are responsible for
America's current economic woes.
"India is a net job creator for US companies,
not the other way around.
"The Indo-US economic relationship benefits
the American economy and its job market in many important and tangible ways,"
Mittal wrote in an opinion piece in the Seattle Times.
The US has emerged as a preferred destination
for Indian investment. In fact, India now ranks second, behind the UAE, in
the list of fastest-growing foreign investors in the US, he argued in his
article.
Observing that India has never sought publicity
for its commercial connections to the US, Mittal said India it has quietly
become both a major investor in America and a significant destination for
American goods and services.
"It has a rapidly growing population
of consumers hungry for products of many kinds.
And unlike other large economies that have
been suffering through recessions in recent years, India has increased its
total outward foreign direct investment and devoted an increasing share of
that largesse to the American market in need of financial support," he
said.
Referring to a recent study by Ernst &
Young, which was commissioned by the Federation of Indian Chambers of Commerce
and Industry, Mittal said it found that Indian companies have increased their
investment in the US by more than $20 billion over the past five years.
According to the study, those investments
have supported the creation of more than 65,000 American jobs.
"That number got even higher when President
Obama visited India in November.
At the President's summit with Prime Minister
Manmohan Singh, US business leaders signed export deals with India worth more
than $10 billion to US employers like Boeing.
President Obama estimated those contracts
would create 50,000 American jobs many in the Seattle area in the near future,
proof that America's expanding economic partnership with India is far from
a one-way street," Mittal said.
The study also revealed another welcome trend:
an increasing percentage of India's outward-directed investment is going to
the US In the past two fiscal years alone, roughly 20 percent of Indian companies'
acquisitions abroad were in the US, and that percentage is still rising, he
said.
In fiscal 2009 and 2010, Indian companies
made 536 foreign acquisitions and 105 of them were in the US.
During the quarter that ended in June of this
year, Indian companies completed 101 outbound acquisitions of which nearly
a quarter were American firms.
The companies that were purchased tended to
be in the same industries that Americans fear are losing the highest number
of jobs to India.
According to the study, information technology
was the fastest-growing area of outbound investment, followed by manufacturing
and pharmaceuticals.
