Source | www.financialexpress.com | Arun M Kumar
The India-US economic engagement is a story of secular growth and mutual job creation. Growing at 10% on a year-to-year basis, bilateral trade reached $160 billion in 2019. Two-way investment between India and the US reached $60 billion in 2018, with the creation of jobs by American companies in India and by Indian companies in the US—about 100 Indian companies have invested almost $18 billion in the US and created over 113,000 jobs. Other areas of collaborative contribution include R&D as well as CSR.
Both domestic and foreign investments have risen, there has been increased spending on creating infrastructure, and a steady rise in the demand for consumer durables along with a surge in air travel. While there has been a recent slowdown of India’s economic growth, the country offers investment opportunities for American companies to grow in India. In fact, India is a place where American companies can turn to as they divert supply chains from China.
For India, the US has been a large and strategic market. American businesses have taken note of India’s rise in Ease of Doing Business ranking and structural reforms like GST. The converse is equally compelling. Of all foreign companies operating in India, US-based companies are the majority. India can make a difference to most companies’ bottom lines, with its large reserves of talented human resources.
Growth is not limited to companies in IT or manufacturing sectors; several US-based companies have significant sales and field operations in India. More opportunities for job creation are on the way; defence and tourism are on top of the list. To boost India’s defence sector, India has finalised two deals worth $3.5 billion with the US, setting the stage for more bilateral progress. The Make in India initiative provides impetus to greater defence cooperation between the two countries that can create defence manufacturing jobs—where the US can benefit from India’s labour and cheaper components, and India can gain from American know-how and technical expertise.