India: An antidote to US outsourcing fears
India’s successful IT industry is moving up from back-office outsourcing, and into the consumer market in English speaking countries, using the internet.
NEW DELHI — Barack and Mitt have sparred a lot over outsourcing, with China and India as the main targets. But as a new article in India's Outlook magazine points out, there's more to the story than Indians stealing American jobs.
A report by India's National Association of Software and Services Companies (Nasscom) found this March that India's IT sector had created more than 280,000 jobs in the US over the past five years, 218,000 of which are held by US citizens and green card holders, the magazine reports.
"The US is the largest trading partner in the technology sector for the Indian industry and will continue to be so in the future," the magazine quotes Nasscom vice president Ameet Nivsarkar as saying. "Over a period of time, more and more companies are getting closer to their customers. This kind of work can be outsourced [to specialist firms based in the US] but it can't be offshored."
The magazine adds that it's not just IT firms that are creating jobs in the US, either. There are hundreds of Indian origin companies operating tin the US in the fields of education, manufacturing, financial services, healthcare and hospitality, the magazine says. And some of them have been there longer than you think.
Mahindra USA was incorporated in 1994 in Houston. Now it has four assembly and distribution facilities around the US, and Mahindra & Mahindra (the company's Indian parent) actually outsources jobs from India there.
Essar Americas, founded in 1999, now employs around 10,000 people, 99 percent of whom are American citizens, at iron ore and coal plants in Minnesota, West Virginia and Kentucky, as well as BPOs in Texas.
Another firm, Welspun, actually brought 200 unskilled Americans to India to train them in the manufacturing of steel pipe, because the firm didn't want to be seen as a foreign entity. It now employs some 600 people in Arkansas.
"when the US was going through a very difficult phase, we created more jobs and more opportunities, and that is also good for the company. It is not a social service," Outllook quotes Akhil Jindal, Welspun's head of finance and corporate strategy, as saying.
Both Welspun and Essar have made greenfield investments in the US, including a $1.7 billion iron ore pelletizing plant now underway at Essar's iron ore venture in northern Minnesota.