Indian technology industry has been hot for US businesses
for quite some time. Outsourcing to India, setting up operations there and tying
with Indian service providers are not only competitive advantages but for many
US businesses a strategy for survival.
Still, the recent quick series of announcements of big
investment by major US corporations and venture capitalists portends that even
bigger and better things are going to come. Since October, six major US
companies have announced various investment plans totaling well over $8.8
billion. Wall Street Journal is also reporting that venture capitalists too have
increased their direct investment in India.
Many top executives of big US corporations have recently
gone to India to meet with Indian leaders and to announce far reaching
While announcing a $1.7 billion plan in New Delhi, Bill
Gates of Microsoft said, “We are keen to increase the growth of Microsoft
activities in India”.
Craig Barrett, the Chairman of Intel Corporation said in
New Delhi while unveiling his company’s $1 billion plan, “this demonstrates
Intel’s long-term commitment and builds on the foundation we have created during
our 10 years in India”.
John Chambers, CEO of Cisco, discussed Cisco’s $1.1 billion
investment plans with PM Dr. Manmohan Singh.
Indian economy has been growing 7% or so for the past
couple of years. The growth projected for current fiscal year is more than 7%.
Despite such growth, Wall Street Journal reports that foreign direct investment
into India is less than 10% of that in China. That is why the expansion plans of
major US companies are making Indian political and business leaders very happy.
Success of outsourcing to India is definitely making its
high-sector ripe for investment. Gartner Inc., forecasts that within four years
the annual technology spending by Indian companies would top $43 billion,
representing an annual technology spending growth of over 20%, much higher than
4.5% expected worldwide.