Indian companies create big jobs for US

Discussion in 'Economics' started by Yuvrajjj, Mar 7, 2008.

  1. This piece of information involving India’s small entrepreneurs could embarrass Senator Barack Obama on the most crucial day of his political career. For all his criticism about Indian firms sucking up US jobs, one of America’s top consulting firms has said on the contrary, Indian companies are creating more jobs in his country.

    “Our estimate is that in 2007 alone, Indian firms that set up shop in the US through greenfield units or via acquisitions created no less than 65,000 jobs,” said Federation of Indian Chambers of Commerce and Industry (FICCI) secretary-general Amit Mitra.

    Ernst & Young has conducted a study called ‘Report on Direct Investments in USA by Indian Enterprises’ for the industry association. More interesting is the fact that nearly three-quarters of the companies that were shopping in the US were small and medium enterprises (SMEs) or midcap firms.

    The E&Y report found that of the 46 companies that went to the US in 2007, 33 (or 72%) were categorised as SMEs and midcaps. That’s not all. Of another 14 firms that invested in the US until March this year, over 50% belonged to the SME and midcap category. Says Mr Mitra: “SMEs alone have created over 35,000 jobs in the US in the past year. It is also important to note that Indian firms are acquiring and reviving companies that were either closed or facing closure, giving hope of new job opportunities.”

    India has invested in the US thrice as much as the latter has in India in the indirect investment segment as well. And the investments are only going to increase in the years to come. Setco Automotive executive director Udit Seth said, “We needed people who could understand the demographics and psychographics of any market to the best. And who could understand it better than people staying in that area; so we have over 60 Americans working for Haldex Brake Products, which we acquired a year ago.”

    Of the 86 M&As in 2007, 33 were by SMEs. The M&As were valued at $4.3 billion in 2005, crossed the $15-million mark in 2006 and breached the $35-billion level in 2007, according to the E&Y study.

    According to FICCI officials, there are around 80 Indian SMEs and midcaps with a presence in the US, and all of them are generating employment in the country. Though the investments made by these companies are minuscule compared with larger groups such as the Tatas and Essar, cumulatively these firms create substantial employment opportunities in the US.

    ‘Invest in USA: The Indian story’, published in the Chicago Chronicle, was an initiative Indian SMEs participated in along with biggies such as Tata, Essar and Reliance a few months ago. Of this 40-company delegation that travelled to the US, 15 were in the SME category. In 2007-08, investment including big companies in America was $10.25 million. “Around 60% of the companies generating employment and investing in the US are SMEs,” adds Mr Mitra.

    According to the promoters of companies that have invested in the US, senior positions are also held by US citizens now, which wasn’t the case before. “About 70% of our management consists of Americans in the US and British in the UK. In the past couple of years, we have invested around $60 million in these countries and have carried out five deals in the US,” says Core Projects and Technologies CMD Sanjeev Mansotra.

    The IT company acquired and increased stakes in five US companies. Of the total 46 investments made in the US in 2007, over 22 were by IT companies while pharmaceutical firms ranked second with four deals in their kitty.
  2. If you remove liquor stores, grocery stores and gas stations from the data, what do the numbers look like?
  3. The report talks about jobs created by investments, acquisitions & revivals of loss making companies & not grocery stores & gas stations. You must be mistaking Indians with people from Pakistan & Bangladesh :p

    here's another report :

    India Beckons Indian-Americans Back with Jobs

    For second-generation Indian Americans, returning to their parents' home country can be a cultural odyssey. As the Indian economy booms, however, there are other reasons for American-born Indians to return to their roots. The country that many of their parents fled for lack of opportunity now needs their skills.
  4. Yuvrajj,

    I am a second-generation Indo-Canadian living in Vancouver, BC. I had a choice of buying a condo here in BC or buying a plot in the outskirts of Ludhiana, I decided to go with Ludhiana, India. Some may say why, but if you look at the long term specs, India presents a host of alluring possibilities, most notably is the country lacks infrastructure, roads, but makes up for it with their will. I think the GDP is 9% and the amount of growth that has happend in the past 10 years is just mindboggling, the best way to the average person is what the babyboomers had in 30 years.

    I think its a great place to invest - but i think real estate prices are inflated, they will come down, however long term 5-10 years, I will have made the right choice.
  5. This is a joke, right? 65,000 jobs doesn't even qualify as a rounding error. Total employment in the US is 140 million as of Feb 2008, that is, this morning's report. I won't even bother to calculate the percent that 65,000 is of 140 million.
    Between Obama's economic illiteracy and yours, there ain't much daylight.
  6. "
    I am a second-generation Indo-Canadian living in Vancouver, BC. "

    Is it true that Packies can't drive very well?
  7. Sellingrich - that is an obscene, and racist comment. I won't dignify you with a response, but I have reported you.

    "If you can't see God in all, you can't see God at all' - is what the Sikh faith teaches.

    God Bless,
  8. Most of the Indian companies I've seen in the US populate their operations withIndians on L-1 or H1-b visas.

    Not exactly helping US employment now is it?
  9. pod11432


    blackchip is absolutely correct. Here in rural Minnesota there is a Suzlon (Indian owned) wind turbine construction company. Majority of the engineers and worker are in fact Indians themselves. Suzlon promised to created local employments but I guess a company will say anything to get tax incentives among other benefits for itself.
  10. Look on the brighter side, the Indians are creating jobs for themselves, it'll keep them from stealing jobs from Americans :D
    #10     Mar 8, 2008