Sunday, 27 September 2015

Indian IT companies paid $22 billion in US taxes over five years

India's tech industry ponied up more than $22 billion in US federal, state, and local taxes in the 2011-2015 timeframe even as its $2 billion investment in America supported more than 4,10,000 jobs in the US, a new report by India's software and services trade association Nasscom has revealed.

The report, released by commerce minister Nirmala Sitharaman on the sidelines of the US-India Strategic and Commercial dialogue on Monday, seeks to dispel the "myth" that India is bleeding US white-collar jobs and distressing its tech economy. On the contrary, it says the economic value of the operational support provided by India's IT firms to over 90% of Fortune 500 firms and thousands of other American businesses "make them more innovative, competitive, primed for new market opportunities, and eager to expand jobs."

"Leveraging Indian talent, American firms have been able to bring cost-competitive solutions that have helped improve their global market share and bring products with shorter production cycles," Sitharaman said, adding that the report "focuses on that part of the India-US bilateral equation, illuminating many of the benefits that Indian IT organizations bring to the US in period covered by the study."

According to the report, two-way trade between US and India topped $580 billion over the last seven years, including $103 billion in 2014. In the same timeframe, India's foreign direct investment in the US has doubled, touching $7.1 billion. US FDI in India during this period was $24.1 billion. While the numbers are chump change compared to US-China trade, the report emphasized that the Indian tech industry through their US operations supports 156,000 direct jobs and 255,000 indirect jobs.

"The two-way flow of investments and intellectual talent is central to the growing commercial and strategic relationships between India and the US," said Nasscom President R Chandrashekhar, noting that the organization has been advocating more open markets for US companies in India, as well as for US policies that permit temporary high-skilled workers from India to support their hundreds of American customers.

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