Indian investment in job creation in US needs good PR

In his State of the Union speech President Barack Obama launched his reelection campaign by hitting out at outsourcing, this time it was mostly about getting "manufacturing jobs back" to the US. Although Obama did not mention India by name, he has frequently invoked the country - which has been a beneficiary of low-cost arbitrage by US businesses trying to improve their bottom- line under pressure from stockholders - as an example that undermines US economic primacy.

He called for lower corporate taxes and incentives for US manufacturers to take foreign jobs back to America and ending tax breaks for businesses that continue to outsource.

But despite the rhetoric, fact remains that US continues to face a shortage of skilled technical staff - a trigger for offshore outsourcing of software coding and computer hardware management jobs.

To stop outsourcing first US has to get people educated and bring their salaries and benefits to the level, which are being paid to outsourced countries. For both the measures mentioned above it would be hard to get average Americans to agree as they are comfortable with their salaries and educations. Education is not cheap in the US as compared to the developing countries making it hard for the youngsters to invest in higher education.

And on their part, Indian tech firms have been increasing proportion of local staff in the US. HCL Technologies said it will create 10,000 jobs in US and Europe within next five years. Infosys is increasing its 15,000 strong US headcount by a 1,000 this year and the company will start a new development centre in the US in this quarter. Wipro has articulated its goal of having 50% local staff in its foreign locations.

Investments by Indian companies in the US have led to the creation of more than 100,000 jobs and saved thousands of jobs from being eliminated. Data compiled by the Confederation of Indian Industries (CII) reveals that just seven Indian companies alone currently have 65,000 employees in the US, with the Tata Group alone employing 24,000. A CII survey released last year showed that, in the past five years, Indian companies have invested more than $26 billion in this country across many industries, and have provided crucial support to recession-beleaguered states like Ohio, Pennsylvania, California, Louisiana and Michigan.

Apart from the investments and job creation in the US, Indian IT companies here, despite generous tax breaks and incentives, have also contributed $15 billion in taxes in the past five years, foreign secretary Ranjan Mathai said, on a recent visit to Washington, DC. Though $25 billion does not sound a lot for a $15-trillion US economy how many Americans know that Essar is investing more than $1 billion in a new steel plant in Minnesota? Or that Reliance is helping produce shale gas for the Eastern Seaboard? India's economy is much more than IT and outsourcing and these industries are creating jobs in America. High time we made lot of sound about it.

[ BY VRN ]