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Business News -> IIndian firms also create jobs in America: US official.


INDIAN FIRMS ALSO CREATE IN AMERICA: US OFFICIAL
New Delhi, January 12, 2008 (IANS)

David BohigianIt was necessary to inform Americans that Indian companies were also creating jobs and not just offshoring them to distant shores for lower costs, a top US Commerce Department official said here Thursday. Indian companies have been steadily employing more and more Americans, with 2005 figures of the US Department of Commerce recording 12,000 of them employed by Indian firms.

Speaking at an interactive meeting with members of the Federation of Indian Chambers of Commerce and Industry (Ficci), US Assistant Commerce Secretary for Market Access and Compliance David Bohigian said most of the attention in the US presidential election campaign in terms of trade was on the fear of China, low-cost foreign labour displacing American jobs and offshoring to India.

"We have to make known that Indian companies are investing too... It is not just an offshoring story," he said, adding it was "important to highlight that Indian and American companies are creating jobs".

According to US government statistics, India accounts for only about 1% of foreign direct investment (FDI) flows into the US from Asia, but is the fastest growing country in terms of average annual growth of investment at over 70% from 2002 to 2006.

Meanwhile, Indian business chambers also hope to offset any possibility of the US presidential election campaign raking up the issue of offshoring by taking pro-active measures. "We are planning a road show of 15 Indian companies to travel to 10 US cities between February and September to target key lawmakers to show that Indian companies are creating jobs," said V.K. Topa, adviser to the Ficci secretary general.

The senior American official was in India to woo investments - a rather new policy programme of the Bush administration. Earlier, the US administration did not have a policy to actively join the international fray to woo foreign investment, with the country accounting for a peak of over a quarter of global FDI inflows in the late 1990s. But 9/11 changed the scenario, with capital inflows dropping down to nearly 7% in 2003, fuelled by visa restrictions and also domestic fears regarding foreign investment in strategic sectors.

With China and to a less extent India garnering a large share of FDI, the US launched the "Invest in America" initiative in March 2007 to attract foreign investment, providing services on how to navigate the regulatory mechanism and contact the right people in Washington DC.

In terms of visas, he pointed out that the backlog of visa applications had come down significantly, adding India accounts for the largest number of work and student visas to the US.

Bohigian admitted that the American public was still apprehensive over foreign investment, collating it "incorrectly" with job displacement. He pointed out that a Pew global study of 47 countries had found Americans to be the most negative about trade, which contradicts statistics on the benefits accrued from foreign trade.

"Every family of four is benefited to the tune of $10,000 from foreign investment," he said, adding that a job in a foreign company is one third higher in terms of salary than that in a domestic company.

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