US benefits from economic engagement with India

The US is tremendously benefiting from doing business with India as 372 acquisitions worth $21 billion and 127 greenfield investments worth $5.5 billion by Indian companies has created nearly 60,000 jobs between 2004 and 2009, a report said on Wednesday.

The report 'How America Benefits from Economic Engagement with India,' was released by influential Congressman Jim McDermott. India's deputy ambassador to the US Arun Singh was also present on the occasion.

The study follows US President Barack Obama who lastyear ended years of tax incentives to those US companies which create jobs overseas in places like Bangalore through outsourcing. Instead, the incentives would now go to those creating jobs inside the US, in places like the Buffalo city, he had said.

"We will stop letting American companies that createjobs overseas take deductions on their expenses when they donot pay any American taxes on their profits," Obama had said.

The report released on Wednesday investigates one specificaspect of globalisation of the American economy, namely, the United States-India business relationship.

During 2004-2009, 90 Indian companies made 127greenfield investments worth $5.5 billion, and created 16,576 jobs in the US.

Greenfield investments are a form offoreign direct investment where a parent company starts a new venture in a foreign country 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 servicessector received less than 15 per cent of total investment, and the bulk of investments went into mining, manufacturing, andother industries, the report said.

The top three states in terms of jobs created wereOhio, Texas, and California, the report said.

During 2004-2009, 239 Indian companies made 372 acquisitions in the United States.

The five US industrial sectors that received the mostgreenfield investment were Metals; Software & IT Services; Leisure & Entertainment; industrial machinery, equipment & tools; and financial services, accounting for almost 80 percent of total greenfield investment in the US.

Giving a comprehensive analysis of America's economicengagement with India for the period 2004 to 2009, the reporthas been jointly produced by University of Maryland, India-US World Affairs Institute and Federation of Indian Chambers of Commerce and Industry.