India, often accused by American politicians of hijacking jobs from "Buffalo to Bangalore", has actually created about 60,000 jobs in the US in the last five years with investments topping $26.6 billion, says a new study.
These investments included 372 acquisitions worth $21 billion by 239 Indian companies and 127 greenfield investments worth $5.5 billion between 2004 and 2009, said the report, "How America Benefits from Economic Engagement with India", released on Tuesday by Congressman Jim McDermott.
The joint study by University of Maryland, India-US World Affairs Institute and Federation of Indian Chambers of Commerce and Industry (FICCI), pointed out that the 127 greenfield investments where a parent company starts a new venture from the ground up, also created 16,576 jobs in the US.
The top three destination states for greenfield investments were Minnesota, Virginia and Texas and the top three states in terms of jobs created were Ohio, Texas, and California, the report said.
Software and IT services sector, another bone of contention among US politicians, actually received less than 15 per cent of total Indian investment, and the bulk of investments went into mining, manufacturing and other industries, the report noted.
The five US industrial sectors that received the most greenfield investment were metals, software and IT services, leisure and entertainment, industrial machinery, equipment and tools and financial services, accounting for almost 80 per cent of total greenfield investment in the US.
Five states that attracted the most investments through mergers and acquisitions (M&A) by Indian companies accounted for 75 per cent of total deal value: Georgia, New Jersey, Michigan, California, and Texas.
The five leading US sectors receiving M&A investments from India were manufacturing, IT & IT enabled services, biotech, chemicals and pharmaceuticals, automotive and telecom - for a total of 83 percent of total deal value.
The bulk of M&A investments by India Inc in the US were in manufacturing and other industrial sectors, rather than in services for which India is well known.
The value of US acquisitions by Indian companies fell in 2008 and then again in 2009 even more steeply, a result of the worldwide recession, the study noted.
"It is, however, interesting to note that greenfield investments rose through 2008, achieving their highest level that year, and then registered a decline in 2009, though the decline was not as steep as for acquisitions," it said.
"This is possibly because making a greenfield investment is a longer-term decision, while acquisitions are often opportunistic and accomplished relatively more quickly."
The study follows a move by US President Barack Obama to end tax incentives to US companies that ship jobs overseas from "Buffalo to Bangalore" through outsourcing, and instead giving incentives to those creating jobs inside the US.
"We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits," Obama had said in his State of the Union speech.
A 2004 Goldman Sachs report had forecast that nearly six million US jobs would be shifted overseas to low-wage countries like India.