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Daniel Witt Headshot

India Creates Jobs in the U.S., Not the Opposite

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As the world's second fastest-growing country, India is having a huge impact on the global economy. And there are lots of misconceptions about whether India's growth helps or harms the United States.

A recent report by the Confederation of Indian Industries provides plenty of evidence that India's skeptics are wrong. It turns out that India's growth is America's gain.

The study, Indian Roots, American Soil, makes clear that India-based companies are having a positive impact on the U.S.: spurring investment, innovation, competitiveness and, most important, American job growth.

About 35 India-based companies with operations in the U.S. were surveyed as part of the study. They collectively employ more than 60,000 people in the U.S. That, in itself, is a surprise to many Americans who generally believe that India sucks jobs out of the country rather than the other way around.

Americans commonly believe that India-based companies only hire Indians in their U.S. operations. But that's not true.

The overwhelming majority of these employees are American. The CII study shows that more than 80 percent of workers at India-based companies in the U.S. are locally hired, particularly in such industries as telecommunications, health care and iron-and-steel. Since 2005, nearly two-thirds of these same companies have hired additional workers.

More to the point, Indian companies in the U.S. actually saved jobs during the economic recession. The study shows that 2,585 jobs were saved from being eliminated through acquisitions by Indian companies of U.S. firms. These companies have played -- and continue to play -- a critical role in trying to temper the nation's far-too-high unemployment rate.

But Indian-company benefits go beyond just jobs. Twenty-five percent of those 35 companies surveyed are making investments in U.S. research and development. Most of them are also helping to improve their local communities by engaging in a variety of social causes that improve the lives of area residents. They have established training programs, contributed to Boys and Girls Clubs, aided Chambers of Commerce and provided assistance to low-income families.

In addition, the study reports, nearly one-third of these companies say they plan to make additional investments in the U.S. in the years to come. In fact, the "Bill Gates of India," Wipro CEO Azim Premji, recently said he expects to double his company's Atlanta presence in the next two years.

"Across a range of areas ... the Indian private sector has led from the front in converting opportunities into mutually beneficial commercial ties that have brought jobs and prosperity to both countries," Meera Shankar, U.S. Ambassador to India, said in praise of the CII study.

In fact, India is one of the fastest growing investors in the U.S. and over the last decade investment capital from India to the U.S. grew at an annual rate of 53 percent. Where did the money go? Almost everywhere you can think of: Pharmaceuticals, telecommunications, health care, oil and coal, iron and steel and information technology.

In short, Indian-owned companies are helping to grow and improve the U.S. economy.

Robert O. Blake, Jr., the U.S. Assistant Secretary of State for South and Central Asian Affairs, noted during an April 22 speech at the Wharton India Economic Forum that the economic relationship between the U.S. and India has been transformed in a very productive way. He said that with India's growth creates comes positive "spillover" for the U.S.

"The progress we have made is to be applauded, for our economic relationship has come a long way," he said.

Blake concluded by saying: "We see India as an indispensable strategic partner in the 21st century. The U.S. welcomes the dynamic rise of India. Whether in energy or agriculture; education or biotechnology, our businesses and governments can leverage our complementary strengths to develop solutions to many of the 21st century challenges."

The assistant secretary is correct.

As the CII study shows, Indian businesses have developed useful partnerships with U.S. companies. They have also developed globally relevant products, invested in diverse industries and contributed to U.S. global competitiveness.

And that's just the beginning.

As India's economy continues to flourish -- it is projected to be the world's third-largest by 2030 -- so does its positive influence on the U.S. Trade between the two countries will continue to accelerate -- both ways. As Indian investments in the U.S. continue to climb, more jobs will be created.

That's good for both India and its good economic partner, the United States.

Hafiz Choudhury is a program advisor and Daniel Witt is president of the International Tax and Investment Center (ITIC), a non-profit research and education foundation.