It reflects on the competence of companies from India helping sick businesses in the economically developed country like U.S. In fact, according to a authenticated global business report, Indian companiesâ€™ presence in general and their contribution in particular to US firms as competent business associates is becoming increasingly significant.
Study finds that Indian companies pumped more than $2 billion into the U.S during 1995-05 which helped sick firms in U.S.A and at the same time created jobs. Thus India Inc has proved it is no longer just an outsourcing partner for the US business community but a real partner for all seasons. This attitude is very well reciprocated so much so that American firms donâ€™t mind an Indian connection at all.
Itâ€™s no wonder then that American companies have emerged as India corporate companiesâ€™ largest business partners, with USA alone receiving the highest amount of Reserve Bank of Indiaâ€™s approved investment at $225 million between April 2005 and January 2006.
In the decade leading up to 2005, the US attracted the highest share of Indian direct investments approvals ($2,159 million) followed by Russia ($1,763 million), Mauritius ($1,038 million) and Sudan ($964 million) says a FICCI & Ernst & Young report.
The reportâ€”â€˜Direct investments in the US by Indian enterpriseâ€™-notes that the software/BPO sector accounted for the largest share (58%) in terms of the number of deals into the US during 2004-06.
Health care accounted for 17% while the remaining 25% deals were in other sectors such as telecom, textile, automotive and financial services.
High levels of technological expertise and knowledge along with entrepreneurial development and management skills helped Indian companies emerge as competent business partners.
Additionally, India Inc learnt a lot as service providers looking for outsourced IT/BPO work from the developed-countries. This imparted the knowledge to conduct international business, and induced outbound investments through demonstration and spill-over effects
Indian firms are actually helping America
The report further observed that not only Indian companies creating new jobs and boosting wages; investments from India are strengthening US manufacturing and contributing to rising productivity. Also Indian companies have acquired several units in the US that had filed for bankruptcy and also set up manufacturing facilities in the US.
Indians are successfully handling the restructuring process of sick units and are increasingly gaining over their American rivals in cost and efficiency. Outbound investment from India help US companies penetrate foreign markets, and increase exports and provides a global platform to smaller and mid-sized companies.
The outbound investments and acquisitions in the U.S by Indian companies are likely to witness a further increase. The new found confidence in the Indian buyers, supported by strong economic fundamentals is expected to foster this growth trend.
Acquisition of manufacturing companies is likely to be gain momentum as there is a scope for significant value creation for Indian buyers to acquire manufacturing companies in developed markets and then restructure the manufacturing model by either off shoring some or all of the production activities to India.
In conclusion if one looks at the positive developments it is a win-win situation for India and U.S. While more jobs and exports are created for U.S, India stands to gain more outsourcing jobs and Indian Inc increase their gross earnings.