India and the US : Trade & Investments

An Expert's View about Business Management, Management Consultancy in the United States

Posted on: 8 Apr 2010

A brief on Trade and Investments outlook between India and US.

Accelerating Success India and For the period April-December 2008, India the US imported goods worth US$ 13.89 billion from the US. India and the United States (US) politically and economically play a significant role in India mostly exports gems and jewellery, the global arena. The US is India?s largest organic chemicals and engineering goods export destination and also one of the and textiles to the US. leading foreign investors in India. Further, with the Indian economy estimated to grow During 2007-08, merchandise exports from to 90 per cent of the US economy by 2050, India to US went up by 9.81 per cent to the growing Indo-US relationship will be a reach US$ 20.72 billion against US$ 18.85 decisive force shaping the contours of the world billion in 2006-07. economy in the 21st century. For the period April-December 2008, India India may soon attract huge investments exported goods worth US$ 15.71 billion to from American companies in the solar the US. energy sector. Fourteen American companies visited India in late March 2009 US Investments in India to explore business opportunities in solar energy sector in the country, as part of the India's rapidly expanding economy along first official trade mission of the new with a booming consumer market and easy administration of the US President Barack Ob availability of skilled personnel has been ama. instrumental in attracting several American Moreo companies to invest in India. The overall ver, US fund houses are showing foreign direct investment (FDI) equity flow great confidence in the Indian economy. T into India from the US during April 2000-hey have recently launched five more March 2009 was US$ 6.3 billion. During India -specific exchange-traded funds 2008-09, FDI inflow from the US was US$ (ETFs) to tap India?s growth potential. 1.8 billion. On other fronts too, India and the US After companies like Microsoft, Intel, IBM, continue to enter into agreements. They Dell, Citigroup, J P Morgan and Morgan recently concluded three agreements Stanley, many other US companies are also including the creation of a science and planning to enter the Indian market with technology endowment fund and a technical big investments. safeguard agreement for the launch of civilian satellites incorporating US ? Alexandria, the US-based life science components. infrastructure company, will invest Trade around US$ 200 million in Andhra Pradesh Industrial Infrastructure Corporation?s SEZ Genome Valley in Bilateral trade between India and US Hyderabad. amounted to US$ 41.75 billion in 2007-08. ? The American aerospace industry will be investing in the development India imports aircraft and aviation m of infrastructure in India's aviation, achinery, nuclear reactors, optical and m after selling aircraft and edical instruments, precious stones and m components to India. etals, fertilizers and organic chemicals ? US-based Astonfield Renewable from the US. Indian imports from the US Resources is planning to start grew by an astonishing 79.33 per cent to renewable energy greenfield reach US$ 21.02 billion in 2007-08 against projects of 500 mega watts (MW) US$ 11.72 billion in 2006-07. across India over the next 5-7 years. Besides the big companies investing in India, the country continues to provide back Accelerating Success office work to a large number of US headquartered Hartmarx companies and industries, such as Medical Corporation for US$ 119 million. Transcription (MT). It is estimated the size ? Besides, Biocon Ltd has entered into of the US MT industry would reach US$ 16.8 an exclusive collaboration with the billion by 2010. The work offshored is US-based generic drugs major expected to be in the region of US$ 860 Mylan Inc to develop, manufacture, million in 2010, of which India is expected supply and commercialise many to capture US$ 647 million. high-value generic biologic compounds for the global markets. Indian Investments in US Road Ahead Indian investments in the US have been growing significantly since 2002, by around There are several areas where there is 75 per cent per year. Investments in 2006 abundant scope to further improve were estimated at around US$ 2 billion and economic cooperation between India and rose sharply in 2007 to touch US$ 13 billion. the US. Opportunities for progress exists In 2007-08 alone, an estimated US$ 10.25 especially in areas like communication billion was invested by Indian companies in infrastructure, the IT sector, telecom sector, the US. In 2008, investments were in excess IT-enabled services, data centres, software of US$ 8 billion as on May 2008. development, and other knowledge industries such as pharmaceuticals and According to a study jointly conducted by biotechnology. Indian industry association FICCI and Ernst & Young, during the last two years, Indian A white paper titled, 'India's Role in the companies acquired 143 US firms across Globalization of the IT Industry' by various sectors. While 94 deals were Evalueserve, a knowledge process concluded in 2007-08, in the following year outsourcing company, states that India is when the economy was on the downturn, likely to emerge as the second largest IT Indians bought as many as 50 US entities industry after the US in terms of revenue that were on the verge of closure, saving and employment. As the US and India?s IT thousands of jobs. industries are closely and inextricably linked with each other, the two countries According to the study, Tata Chemicals, will import and export more IT services and Wipro, Reliance Communications and products for the coming seven to eight Firstsource Solutions were some of the top years. Indian entities that were involved in bailing out US companies in the red. According to a Confederation of India Industry (CII) report titled ?India-US Another study called the ?Contribution of Economic Relations: The Next Decade?, the Indian industry to the US economy? says bilateral trade between India and the US that during the period 2004-07, Indian could increase eight fold to US$ 320 billion industry had contributed US$ 105 billion to in 2018 from US$ 42 billion in 2007-08. the US economy and created 300,000 jobs. Some recent investments include: ? Pharma major Lupin has acquired the global rights for an intra-nasal steroid (INS) product, AllerNaze from Collegium Pharmaceuticals, a mid-size innovator company in the US. ? S. Kumars Nationwide, along with its operating partner Emerisque, UK, has acquired Chicago- Accelerating Success Innoversant Solutions Pvt. Ltd. #62, 1st Cross, 2nd Main, Dollars Layout, Fixed Line: +91 80 64516669 J.P. Nagar 4th Phase, Tele-Fax: +91 80 2649 1996 Bangalore 560078 Email: INDIA Web:
Posted: 08 April 2010

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