In light of Indian Prime Minister Narendra Modi’s recent visit to the United States, the Metropolitan Policy Program at the Brookings Institution published an article outlining the enormous extent of Indian trade and foreign direct investment (FDI) in the United States, suggesting that there already exists a solid foundation on which to strengthen bilateral economic ties. The report revealed that some 43,000 Americans are currently employed by Indian-owned companies in the US, with the greatest concentrations in New York, Detroit, Los Angeles and Chicago.
As the report points out, the American press pays little attention to the broad ties between India and the US, particularly the jobs created through FDI. Even less attention has been paid to the American jobs saved by Indian companies, many of whom have purchased businesses that would otherwise have failed. Over the last ten years a number of large Indian corporations have invested in failing US businesses, rescuing not only the investors, but preserving the jobs that would have been lost.
One such company is Essar Global, a Mumbai-based corporation, which in 2007 purchased Minnesota Steel for an undisclosed sum. The US steel company controlled 1.4 billion tons of iron ore resources, but faced significant cost challenges in light of the slowing auto industry. As part of its North American expansion, Essar purchased the company, keeping on all 7,200 employees, and investing in a new $1.65 billion steel plant in Minnesota. In the same year, Wockhardt, a pharmaceutical company also based in Mumbai, bought Illinois-based Morton Grove Pharmaceuticals for $38 million, saving over 200 local jobs.
Perhaps the largest example of Indian investment in the US is the Tata Group, an enormous Indian conglomerate with business interests ranging from energy and consulting to manufacturing and hotels. Tata has invested heavily in the US, purchasing a wide array of businesses, including Corus Steel’s operations in Ohio and Pennsylvania in 2007, and New Jersey-based General Chemical Industrial Products in 2008. The group now operates 12 companies in the US, employing more than 16,000 people.
FDI from India has done a lot to preserve American jobs during times of economic hardship. As the Brookings report points out, this is just one part of a solid economic foundation for furthering bilateral ties.
Jonathan Gordon recently graduated from the University of Sydney and is a Research Intern at the East-West Center in Washington, D.C.