Guest blog post by Vinai Thummalapally, Executive Director of the SelectUSA Program.
I recently had the great pleasure of participating in an exciting event with Secretary of Commerce Penny Pritzker in New Delhi. Hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI), the event brought together business leaders, investors, and national business associations from across India. I had the opportunity to hear their ideas and share in their excitement about India’s fast-growing foreign direct investment (FDI) in the United States.
India is now the fourth fastest-growing source of FDI into the United States, with a stock of $11 billion in investments as of 2013. As the latest available data show, FDI from India provides:
- Jobs: U.S. subsidiaries of Indian firms employed more than 43,800 workers in the United States in 2012, with an average yearly compensation of $69,800, well above the national average.
- Innovative R&D: In 2011, U.S. subsidiaries of Indian firms invested $46 million in research and development in the United States.
- U.S. Exports: U.S. subsidiaries of Indian firms exported goods worth more than $2 billion from the United States in 2012.
These figures from the U.S. Bureau of Economic Analysis represent real stories of thriving businesses creating real jobs. SelectUSA, the U.S. government-wide program created to facilitate investment in the United States, has assisted several Indian companies as they sought to set up operations locally.
For example, Shri Govindaraja Textiles, or SG Mills, is a third-generation, family-owned business. The group is the largest spinner in India with a total workforce of 30,000 employees. Last year, SelectUSA and the U.S. Commercial Service office in New Delhi, helped company management develop and execute a work plan as they considered investing in the United States. Recently, SG Mills opened its first U.S.-based operation in Eden, North Carolina, and announced plans to invest more than $40 million during the next two years.
Maqdoom Brothers, a clothing designer and manufacturer based in Hyderabad, has been around for more than 100 years. A company representative attended a SelectUSA roundtable in Hyderabad, and then came to our 2013 Investment Summit in Washington. After meeting with representatives from the state of Illinois, the company opened an office in Joliet, as its first step to what company management anticipates will be a much larger manufacturing investment.
Why are Indian businesses investing in the United States? At this week’s event, FICCI and Ernst & Young introduced a report titled “Direct investments in the US by Indian enterprises: Setting the new agenda” that focused on why the United States continues to be an attractive investment destination and why Indian businesses are bullish about expanding operations in our country. Major factors described in the report include:
- Strong Indo-American relationship. The United States and India continue to strengthen our ties and strategic partnership. Bilateral cooperation is strong and mutual support for business investments is at an unprecedented high level.
- High rate of innovation. The United States is a leader in technology and innovation with an expanding R&D sector. Indian businesses looking to operate in the United States can leverage American innovation for global business success.
- Robust consumer market. The U.S. economy continues to rally and the outlook for sustained growth is positive, with low unemployment rates as well as notable improvements in manufacturing, domestic consumption, and the housing sector.
On March 23-24, 2015, SelectUSA will host its second Investment Summit in the Washington, D.C. area. I expect to see a strong Indian delegation there, ready to foster new partnerships. I am looking forward to hearing many more success stories from Indian business leaders and investors, and share their confidence for continued growth in the United States.