India is a net job creator for US companies, not the other way around, NASSCOM chief Som Mittal said on Friday strongly refuting the public perception here 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 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 (FICCI), Mittal said it found that Indian companies have increased their investment in the US by more than USD 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 Indian Prime Minister Manmohan Singh, US business leaders signed export deals with India worth more than USD 10 billion to US employers like Boeing.
US 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.