Indian companies stepped up US hiring during recession: CII

Last Updated: Wed, May 02, 2012 05:06 hrs

Indian companies in the United States have stepped up hiring, even through the current economic slowdown, according to a study by the Confederation of Indian Industry (CII) released in Washington DC. Nearly three-quarters of these companies have a higher headcount now, compared to the pre-recession period.

The report, titled 'Indian Roots, American Soil: Adding Value to US Economy and Society', compiles data from a survey of 36 major Indian companies doing business in the US across a wide range of sectors. While these represent just a fraction of the hundreds of Indian companies operating in the US, these alone employ about 52,000 workers in the country.

Over 70 per cent of these companies have increased staff since 2005, and expect to create another 3,400 jobs this year. The report also estimates the surveyed companies saved over 2,000 jobs by carrying out 72 mergers and acquisitions (M&As) since 2005. M&As are also projected to create 236 additional jobs this year.

Key findings
95-100% of the employees were hired locally by a third of Indian companies
70% of companies increased employee headcount since 2005
$23 billion was the collective revenue in 2010-11
33% of companies operate manufacturing facilities in the US
36% of companies operate in the IT-BPO sector, followed by 19% in healthcare and pharma, and 17% in manufacturing

Source: CII-IBF Survey of 36 Indian companies with US operations

The report is the second such survey released by CII. It is aimed at countering public and political perceptions in the US about Indian companies stealing American jobs through outsourcing and bringing Indian workers for their US operations. This is particularly important in this election year, as this sort of rhetoric is kicked up a few notches during political campaigns.

The report shows the median average of the workforce locally hired is 80 per cent across various sectors. Companies in the travel and hospitality, telecommunications and manufacturing sectors hire about 90 per cent of their US staff locally. In the information technology (IT) and business process outsourcing sector, which has borne the brunt of criticism against Indian companies, data shows local hiring by Indian IT firms quadrupled in the past year. The IT companies surveyed for this report have collectively invested nearly $1.5 billion in the US, and their payroll exceeded $2 billion last year. About a third of the Indian companies surveyed also had manufacturing facilities in America.

The CII India Business Forum released the report at a reception at Capitol Hill. A total of 21 members of Congress were present at the event, a nearly two-fold jump over last year's attendance. The Democratic and Republican co-chairs of the India Caucus in both the Senate and the House of Representatives were also present. Representatives of over two dozen Indian companies also attended, as did Nirupama Rao, India's ambassador to the US.

Senator John Cornyn (Republican, Texas), co-chair of the India Caucus in the Senate, said, "I welcome the fact that Indian companies are investing substantial capital in the US, which has already yielded tangible results in Texas and across the US." His counterpart, Senator Mark Warner (Democrat, Virginia), said, "This survey confirms Indian companies are key drivers of US job creation and economic activity." A CII official present at the event said a striking difference this year was most lawmakers seemed aware of the economic contributions of Indian companies, adding, "They knew about the importance of this relationship, instead of us having to brief them."

The event showcased Indian companies with manufacturing presence in the US across various sectors, including Mahindra USA, Suzlon and Dr Reddy's Laboratories. Today, India is one of the fastest growing sources of foreign direct investment into the US, while the US is one of India's top five destinations for foreign investment.

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