Indian investments to US grow 60%, cross $7 billion

India is emerging as the third-fastest-growing foreign investor in the recession-hit US economy with an investment of over $7 billion in 2009.

According to a report released by India-US World Affairs Institute and the University of Maryland in partnership with Ficci, ?India is the third-fastest-growing-foreign-investor in the US, with Indians having invested $4.5 billion in the US in 2008 and their investments grew by an estimated 60% in 2009.?

The report was released by Congressman Jim McDermott, co-chair of the Congressional Caucus on India and Indian-Americans, at a function organised by the East West Centre, a Washington-based think tank on Tuesday.

The joint study has found 372 acquisitions by Indian companies in the US between 2004 and 2009 worth $21 billion. This has created an estimated 40,000 employments in the US.

Talking to FE, Ficci secretary general Amit Mitra said there were 127 greenfield investments worth $5.5 billion by Indian companies in the US. He added, ?So these are huge numbers that India is contributing to the US economy.?

US needs to do more in the infrastructure sector, he said.

The five US industrial sectors that received the most greenfield investment were metals; software & IT services; Leisure & Entertainment; industrial machinery, equipment & tools; and financial services, accounting for almost 80% of total greenfield investment in the US. It is noteworthy that the software and IT services sector received less than 15% of total investment, and the bulk of investments went into mining, manufacturing and other industries.

The report has indicated that five states that attracted the most M&A investments from Indian companies accounted for 75% of total deal value — Georgia, New Jersey, Michigan, California, and Texas.

Also, US manufactured exports to India were linked to 96,000 manufacturing and non-manufacturing jobs in the US in 2009. Ten states accounted for only 62% of all US jobs linked to exports to India in 2009, indicating that the benefits of exporting to the country are wide spread throughout the nation.

These numbers do not include agricultural, mining, and services exports, which will have their own implications for jobs in the US. For instance, in 2007 the US exported services worth $9.4 billion to India, compared to the goods worth $15 billion that is the focus of the study.

To boost the US involvement in India, Ficci is following Track II policy, envisioned by the external affairs minister SM Krishna, and the secretary of state Hillary Clinton when they met on June 3 in Washington DC.