Impact of India Economy on USA

Impactof India Economy on USA

Impactof India Economy on USA

Indiaeconomy has been on the rise for years now therefore this has led tomany United States of America (USA) Companies to shift theiroperation base from their country to India. The decreased cost ofoperating a business in India compared to USA is the primary driverof this. In the current moment the devaluation of the rupee has madesome industries in India suffer, however export-oriented industriesin India have increased their export to USA because of their productsbecoming cheaper. This will result in more jobs being created toservice this orders positively affecting the Indian economy. Theincreasing export business has led in the shrinking trade deficitbetween India and USA. The outsourcing of high-tech informationtechnology (IT) jobs to India has enabled the USA IT Companies to cutcost while India meeting this need is benefitting from cashremittances. The need to provide these kinds of skills has given riseto IT institutions of excellence further improving the variety ofspecialized skills pools available in India. This effectively hasupgraded the India outsource opportunity from essential services likecalls centers to better-paying business processes outsourcing (BPO)opportunities.

Theimpact of India rising economy prospects is resulting in a fiercecompetition between India and China the fastest growing economy inthe world currently. This is because both countries compete in nearlyevery field starting from outsourced jobs to export industries. Chinahas an edge in manufacturing sector while India is ahead of China inthe service sector especially in the IT field (Yokokawa et al, 2013,p.11). The slowdown in China economy growth has produced mixedfortunes for Indian Companies consequently Steel manufacturers areexperiencing a dip in their business revenues negatively as ordersfrom China drop down. User industries like capital goods, consumers`durables among others look forward to better fortunes as rawmaterials expenses decline because of China slowdown. What is provinga headache for India economy currently is that a global economy is sointegrated that an overly domestic protectionism will hurt the samelocal economy so balancing this is very tricky.

References

YokokawaN, Ghosh J &amp Rowthorn B (Ed). (2013). Industrialization of Chinaand India: Their Impacts on the World Economy. London. Routledge.